Anonymised project exposure · Southern Africa · Utility solar IPP

The 6.5 USc/kWh tariff improved the returns. I still needed to know what would actually reach the project account.

I supported model review, financing analysis and bankability work for utility-scale solar projects using private C&I offtake, grid wheeling, operational services and a payment-agent structure. The names are withheld, but the commercial questions are the same ones I worked through in the live project material.

~50 MWac / 58.5 MWdc25-year PPA structureP90 debt caseDSCR · LLCR · reserves

My starting point

I reconciled the model with the transaction documents.

The projects were being developed through a multi-party private-power structure. A generation model could show attractive returns while leaving out the deductions and contract conditions that decide how much cash is available for debt service.

I moved between the financial model, technical yield material, EPC and BOQ assumptions, draft PPA terms, wheeling and grid questions, operational-agent terms, payment security and financing requirements. Whenever a model input could not be traced back to a document or a clear assumption, I treated it as an open item.

My read

The tariff was only the starting price. I wanted the net amount after wheeling, balancing, trading, losses, taxes and agent fees, then I wanted to know who carried non-payment and curtailment if the structure failed to perform.

What I worked on

  • Revenue, CAPEX, OPEX, debt and equity logic.
  • P50, P75 and P90 generation cases.
  • BOQ and project-cost changes and their effect on returns and coverage.
  • Draft contract provisions that changed model assumptions or lender risk.
  • Decision notes, investor material and lender-facing questions.

What moved the model

The BOQ and tariff changed. The contracts still had to catch up.

One project iteration moved from an earlier cost and tariff basis to a revised BOQ and a 6.5 USc/kWh tariff case. Project IRR, equity IRR and minimum DSCR improved. That did not close the remaining questions around offtake, wheeling, payment security and termination.

Model issueWhy I caredHow I treated it
Energy caseDebt sized on an optimistic yield can create covenant headroom that disappears in the lender case.I separated P50, P75 and P90 and kept the conservative case visible for debt discussion.
Developer premiumIncluding sponsor value in senior-debt sizing can overstate debt-eligible uses.I kept developer premium separate from project cost and treated it as sponsor/equity value.
Net tariffThe headline PPA price can hide agent, wheeling, balancing, trading, loss and tax deductions.Each deduction needed an explicit input or an open-item flag.
Repayment shapeFlat amortisation can create a weak minimum DSCR even when lifetime cash is adequate.I tested repayment sculpting against CFADS and covenant headroom.
Grid interruptionA technically available plant does not earn cash when the network cannot take power.Curtailment, deemed energy and network responsibility stayed separate in both contract and model review.
What changed my view

The stronger returns made the unresolved contract package more important, not less. There was now more value worth protecting.

Questions I carried from the model into the contracts

Bankability review

Payment security
Is the LC funded, on demand, replenishable and available to lenders after a missed payment?
Termination
Do termination payments cover debt, break costs and the agreed equity treatment?
Curtailment
Who pays for network-driven curtailment and how is deemed energy calculated?
Allocation
How is generation allocated across buyers, and who bears shortfall, imbalance and replacement-power cost?
Wheeling
Which party carries network losses, changes in charges, metering errors and interrupted paths?
Cash controls
Are payment agent, waterfall, DSRA, lock-up, cure and lender step-in provisions aligned?

The debt case

I used the cover ratios to find weak years, not to fill a dashboard.

I tested debt quantum, tenor, interest, grace, reserve funding and repayment shape across project iterations. Minimum DSCR was read alongside average DSCR, LLCR, the cash waterfall and the timing of the weak periods.

The practical questions were straightforward: how much debt could the project carry without uncontracted upside, what happened after a six-month payment delay, whether the DSRA could bridge it, and when distributions should lock up.

75%Debt cap tested in lender-style structures
6 monthsForward debt service considered for DSRA
1.20x–1.31xMinimum DSCR range across model iterations
P90Conservative generation basis for debt discussion
Why these are ranges

The work covered more than one project and model iteration. Showing a range is more accurate than presenting one polished number as a final financed case.

What I delivered

The output had to work in sponsor, investor and lender conversations.

Model and QA

Integrated assumptions, calculations, debt schedule, sensitivities, audit checks and reconciliation of changed inputs.

Decision material

Investor executive summary, business plan, finance commentary and clear conditions before external reliance.

Bankability workplan

Prioritised issues around offtake, payment security, wheeling, grid, EPC, land, E&S, tax and financing evidence.

What I recommended

Keep progressing the project, but tie further capital and lender engagement to evidence: buyer allocation, payment security, grid and wheeling documents, locked EPC scope, land and E&S, tax confirmation and lender-accepted model mechanics.

Disclosure

This page is based on genuine project-team exposure. Project, client and counterparty names are withheld. Figures are rounded and combine project iterations. It does not state financial close, lender approval or execution of the outstanding agreements.

Model and contract review

Want the model checked against the actual commercial structure?

Send the workbook, contract list, current decision and deadline. I will start with the assumptions carrying the conclusion.

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