Technical Due Diligence

Renewable Energy

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Technical Due Diligence for Renewable Energy Projects

When investing in or developing major energy projects, you need to understand and
mitigate all technical risks before you decide to commit.
The technical due diligence report can help you understand the technical feasibility of
your project with a full technical risk review.
Main sectors of interest:
Photovoltaic
Wind
Biogas and Biomass
Geothermal
Hydroelectric
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Technical Due Diligence for Renewable Energy Projects

The Technical Due Diligence can definitely help you:

Understand and mitigate a variety of technical and socio-environmental risks before you
commit your valuable time and resources to the project
Identify technical risks that could compromise your projects profitability and bankability
Ensure that the technical feasibility of the project makes for a sound investment
Ensure that all factors have been accounted for in the development process

Technical Due Diligence for Renewable Energy Projects

Legal Frame for Renewables National Regulatory

Law no. 220/2008 regarding the promotion of renewable energy sources,
successively amended and supplemented by:
Government Ordinance no. 29/2010
Government Emergency Ordinance no. 88/2011
Law no. 134/2012 for the approval of GEO 8011, amending and adjusting law
220/2008 8/2
Law no. 123/2012 regarding electricity and gas
Government Emergency Ordinance no. 57/2013 published in the Romanian
Official Gazette no. 335 dated 7 June 2013 which will enter into force on 1 July
2013 (GEO 57)
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Technical Due Diligence for Renewable Energy Projects

Incentive Scheme Number of Green Certificates
On 4 June 2013, however, the Romanian Government approved by way of an Emergency
Ordinance new measures applicable to the RES sector as of 1 July 2013. The new
measures (described herein) aim at discouraging future investments in the renewables
sector, but they are also impacting operational investments, thus breaching investors
legitimate expectations.

Temporary suspension of the number of GCs granted to certain technologies:

Starting with 1 July 2013, the issuance of a certain number of GCs will be deferred, as
follows:

new hydro-power plants (below or at 10 MW): 1 GC deferred;

wind: 1 GC deferred;
photovoltaic: 2 GCs deferred.

The deferred GCs shall be recovered starting with March 2017 for new hydro-power plants
and solar, and with January 2018 for wind. The recovery of the deferred GCs will be done
in steps, according to a methodology to be adopted by the regulator.

Technical Due Diligence for Renewable Energy Projects

THE PROJECT

The Sponsor
The Bank

The developer of the Project

The project submitted for funding or re-funding

The technical advisor - understand the technical feasibility of your

project with a full technical risk review

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Our Area of Expertise on Renewable Energy Projects

The Due Diligence analysis is carried out taking into account all the relevant
factors that might influence the project, and providing any practical suggestions
to render the relevant Project bankable, according to the applicable Scope of
Work.
Normally, two phases are identified:
Pre-closing Phase: Due-Diligences are based on documentation provided by
means of a comprehensive checklist and on-site surveys for site feasibility
assessment. Due-Diligence activity includes site assessment, design review (including
quality check of proposed components), authorization check, productibility/cash flow
calculations, contract analysis (EPC, O&M)
Post-closing Phase: Construction Monitoring Reports, including supervision of
work management construction and Acceptance Tests; Operation & Maintenance
monitoring to assure the design performance

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Our Area of Expertise on Renewable Energy Projects

Main issues with impact on projects bankability
Legal
riskRegulator
y
Market
risk

Changes in Legislation
Projects over the installed capacity

Offtake contracts
Dispatching risk

Developme
nt risk

Permitting process
Limited grid capacity

Operation
al risk

Inexperienced local operators

Few international players with limited track record on local market

Revenue
risk

Prices predictability [energy and green certificates]

Green certificate price

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Our Area of Expertise on Renewable Energy Projects

Main issues with impact on projects bankability
Risks- checks to be done
Authorizations

Location/Land
Components type

Connection
Electrical and power estimate

Scheduling

Conclusions

Observations

The permitting procedure appears to have

been followed correctly and in partnership
with the local authorities.
The location has good access and good
connection to the grid

Documentation was made available.

The components are to be considered of

adequate quality and performance for the
design of the project.
The connection is a sound and accessible
one.
The outcome of the power data
assessment is aligned with expectation, on
the basis of the design documentation
The project appears to be technically,
economically and financially feasible.

Project was developed in partnership with

the local authorities.

Location has good potential

The connection solution is a sound and

accessible one.
No major investment is required to connect
the project.
Project scheduling was streamlined. A legal
due diligence could confirm inaccuracies.

On a documental basis, no critical issues that could affect the construction of the
plant have been identified.
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Our Experience Due Diligence Reports for Romanian

Banks and Investors
Project: Wind Farm 27,5 MW Nalbant, Tulcea County, Romania
Status: Ready to build
Reports: Preliminary Due Diligence Report and Independent Engineer
Report
Project: 4 Hydro Plants Boia, Romania
Status: Ready to build
Reports: Preliminary Due Diligence Report and
Independent Engineer Report

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Our Experience Due Diligence Reports for Romanian

Banks and Investors
Project: Wind Farm 27,5 MW Nalbant, Tulcea County Romania

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Contact

DELIA RAUCESCU
d.raucescu@optimpm.com
+40 737 012 555
25A Emanoil Porumbaru Street
3rd floor
Bucharest, Romania
www.optimpm.com