1. Project Financing
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2. Financing options
 Project Financing
 Corporate balance sheet financing
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3. Preliminary steps for the developer
 Identifies the sites with the best resources.
 Negotiates the use of the land.
 Conducts an initial solar resource analysis.
 Completes an EIA.
 Conducts initial layout and design including initial equipment selection.
 Applies for and receives planning permits and consents.
 Applies for and receives grid connection offer or letters of intent.
 Applies for feed-in tariff (FiT) and/or PPA.
 Licences and permits, consents
 Technical solutions
 DPR
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4. Due Diligence by Lender
 Legal due diligence – assessing the permits and contracts (EPC and
O&M).
 Insurance due diligence – assessing the adequacy of the insurance
policies and gaps in cover.
 Technical due diligence – assessing the technology, integration and
technical aspects of the permits and contracts.
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5. Typical areas for Technical Due diligence
 Sizing of the PV plant:
Layout in the land area available.
Appropriate buffer zone around the plant t
account for shading/other activities.
Overall size appropriate for the grid connection.
Layout of the PV modules, mounting and/or trackers, and inverters:
Assessment of level of inter-row shading.
Access to plant components for maintenance and installation activities.
Electrical design layout and sizing:
Assessment of cable losses in the DC/AC cabling.
Assessment of appropriateness of the cable placement and connectors.
Appropriateness of the earthing and protection systems.
Compliance to safety standards.
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6. Typical areas for Technical Due diligence
 Technology review of major components (modules/ inverters/mounting or
trackers):
 Suitable for environment.
 Integration of components.
 Track record of suppliers and models.
 Quality and compliance certificates.
 Compliance to safety standards.
 Warranties.
 Design life.
 Degradation assumptions.
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7. Typical areas for Technical Due diligence
Energy yield assessments:
 Appropriateness of any assumptions made.
 Source of solar irradiation data.
 Assessment of shade.
 Degradation assumptions.
 Uncertainty analysis.
 Model used and modelling techniques.
 Check the theoretical Performance Ratio.
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8. Typical areas for Technical Due diligence
Contract assessments (EPC, O&M, grid connection, power
purchase and FiT regulations):
 Looking for interface points and areas where there could be
risks.
 Examining construction timelines and ensuring that the
critical path is clearly identified and mitigated in the contracts.
 Assessing the warranty and guarantee positions within the
contracts – protection for the lenders.
Financial model assumptions:
 Assessing that the assumptions used are complete and
appropriate
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9. Risks
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10. Supporting Analysis
Probability SEVERIT
RISK
Commercial - Risks (1/3)
of
Occurrence
APPLICABILITY TO XXXX Y OF
IMPACT
Off-taker risk NVVN is the PPA signatory, has a low capital base and a balance sheet .
Off-takers must have PPA is also linked with the with the implementable remedial framework for delays; penalties
for lower) than the guaranteed generation from a non-firm source
the capacity to meet
payments. Also the
project developer LOW MEDIUM
should be able to
meet the contract
conditions of the PPA
Tariff risk
The risks that may SSEL has signed a PPA at the tariff of Rs. 12 per unit. The tariff is applicable for the period
arise in the case of a of 25 years from the COD. The tariff signed by SSEL is a reasonable tariff as compared with
regulated PPA tariff is the other projects of similar nature. NVVN
primarily on account
of the extent of the
tariff revisions by the
regulatory MEDIUM LOW
commission. And the
risks on account of
merchant sale of
power is
predominantly linked
to the variations in the
market price.
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© 2011 Mercados Energy Markets India, the Indian subsidiary of Mercados Energy Markets International – a member 10FirstGreen
company of ÅF GROUP. All Rights Reserved

11. PROBABILITY SEVERIT
RISK Supporting Analysis
OF APPLICABILITY TO XXXX Y OF
Commercial - Risks (2/3)
OCCURENCE IMPACT
Technical risk
Consistent technical SSEL has decided to procure the PV modules from Solar Frontier. They use the CIS thin-
performance is critical film technology which has been developed since 1993. The performance ratio is about
MEDIUM 85% which is highest as per the report submitted by Solar frontier. MEDIUM
to successful plant
operations.
Adequate SSEL has take the quotations from the leading EPC contractors for the execution of the
procurement project activity. SSEL has tied up with the AEG for the EPC of the project and the
structure modules has been sourced directly from Solar frontier to keep the cost low.
An efficient
procurement
mechanism is LOW MEDIUM
essential to procure
the different project
items at a competitive
rates Availability
Plant
The failure to maintain • Plant availability risk for solar PV power project seems to be low due to the modular nature of
adequate levels of the project. The plant availability is function of O&M related problems in the solar modules,
plant availability has and the availability of the inverter units. SSEL has undergone with the AEG to ensure certain
significant negative level of generation. AEG guarantees 92% of KWH of solar in generated electricity fed into
MEDIUM LOW
implications for power the Inverters at a minimum insolation of 500W/m2 at grid as recorded on state government
and consequently on utility meter.
revenue generation. • Another risk for plan availability is due to grid unavailability risk. Currently the grid
unavailability risk in such projects has not been observed.
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© 2011 Mercados Energy Markets India, the Indian subsidiary of Mercados Energy Markets International – a member
FirstGreen
11
company of ÅF GROUP. All Rights Reserved

12. RISK
Supporting Analysis
PROBABILITY
OF APPLICABILITY TO XXXX
SEVERITY
OF
Commercial - Risks (3/3)
OCCURENCE IMPACT
Compliance risk • SSEL has acquired the required statutory clearances for the project. As the project activity is
Solar power projects under commissioning phase some of the clearance are underway and will be availed in due course
must comply with a host of time.
of state and national
regulations governing
the purchase of land,
utilization of labor,
power evacuation, etc.
LOW LOW
Failure to comply with
the prescribed statutory
requirements could
expose projects to
punitive measures by
the government up to
and including shut-
down.
Technology Risk • As per the study PV Syst simulation study conducted by the Solar Frontier for a typical site the CIS
Solar power projects technology has a higher performance ratio as compared to the mono crystaline or the poly
must select appropriate crystaline technology. This because of the two reasons. Due to light soaking effect in CIS (copper
technology for the PV indium selenide ) technology the performance ratio is higher in this technology.
modules. There are of
number of technology
options available
ranging from the thin film HIGH MEDIUM
technology to the
crystalline silicon
technology. The
appropriateness of
technology has severe
impact on the project
performance.
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© 2011 Mercados Energy Markets India, the Indian subsidiary of Mercados Energy Markets International – a member 12FirstGreen
company of ÅF GROUP. All Rights Reserved

13. Thank You
FirstGreen Consulting Private Limited
Gurgaon:
206, Tower B, Millennium Plaza, Sec 27, Gurgaon – 122002,
India
Tel.: (+91) 124 424 1750 , 9899295854
Fax: (+91) 124 424 1751
Web: www.firstgreenconsulting.in
Email: sanjayvashishtha@gmail.com
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