Once you’ve established a strategy and business case for your renewable project, it’s time to think about how to finance it. Building a new renewable generation facility can be a major drain on the company’s balance sheet. Financing is a major challenge, especially during construction when the project is vulnerable to cost overruns.
Understanding how a particular project fits with the market, with your risk appetite and with the rest of your generation portfolio is critical. The latter is particularly vital with some kinds of renewable power like wind, where intermittent production means that load balancing becomes more important than ever. We use a range of modelling techniques to give you a clearer picture of the strategic context of the project and, in particular, the extent to which it fits your company’s risk profile. We can also help you understand the impact on your overall capacity during peak periods and potential blackout risks.
Investor interest in renewable energy is on the rise, but there are still a lot of uncertainties, particularly in areas like offshore wind that don’t have as long a track record. PwC can help assess your potential investment, including due diligence, tax structuring and business plan review, so that you can make an informed decision.
Our team has deep experience in securing financing for renewable investments through both equity and debt instruments. We’ve helped a whole range of companies finance their plans, from cleantech start- ups through large municipal utilities. And we’ll give you sound advice on tax matters, including both corporate tax structure and specific issues relating to the renewable energy industry.
Companies can take many steps to help their financing position. Step one is to pursue good structuring at the project development stages – using alternative financing resources such as export credit agencies, good contract structure, and recognition of electricity markets to secure early rate recovery in regulated markets or offtake agreements in merchant markets. We can help you evaluate all your options, from contract financing through co- operative arrangements or newer options like drawing rights.
Tax equity structures are another means of raising capital in some countries, but it’s important to find the right structure and understand how the transactions affect accounting and financial reporting. We can help you evaluate and decide on whether to use options like flip structures and sales leaseback models.