Commercial Structures and Project Bankability
Information
The commercial structure of a renewables project for a mine will determine its cost of financing which is why it’s critical to develop the right solution early in the process. As the market continues to mature, some projects have finalized commercial contracts before approaching lenders and found financing a challenge. This panel will provide critical insight from finance experts on their due diligence processes and what should be considered in developing the commercial contracts.
● What should mines and IPPs keep top of mind in determining the commercial structure?
● What are some of the common problems or wrong approaches with these deals that can hamper the cost-benefit for miners and/or IPPs?
● Build–Own–Operate–Transfer vs. PPA vs. debt financing - how do finance experts view the risks associated with different commercial structures?
● What is the core focus of finance experts’ due diligence processes - what tips the balance for bankability?
● What are some examples of lending restrictions that would prevent participation in renewables for a mine offtaker?
● Are there external incentives or funding opportunities, i.e. the Green Climate Fund, that inform the due diligence process?
● What are the key considerations when assessing the quality of the offtaker?
● How is an operating mine viewed vs. a greenfield site in terms of investment risk?
● Under what circumstances is it acceptable for life-of-mine to be shorter than project payback?
Speakers
