Q0029
An investor should verify the project’s rights, revenue, grid connection, land, approvals, energy yield, costs, contracts and delivery capability before relying on financial returns. Due diligence should focus first on risks capable of preventing construction or eliminating revenue, then on optimising the investment structure.
Solar projects may appear mature because they have land, an announcement or preliminary engineering. Investment readiness requires evidence that the project can lawfully connect, sell electricity, reach commercial operation and maintain cash flow under realistic downside conditions.
Determine whether the investment concerns:
The required return and diligence should reflect the remaining development risk.
Confirm:
Documents should be checked with the issuing authority or relevant counterparty where possible.
Examine:
For CRESS, the investor must understand the relationships among the renewable developer, green consumer, utility, grid functions and Single Buyer, as well as applicable system-access charges. CRESS programme
Review:
Do not treat proximity to a substation as evidence of connection capacity.
Check:
The independent engineer should test:
Debt cases should not rely exclusively on an optimistic central forecast.
Assess:
Ensure the budget includes:
Review the strength of:
Contracts should allocate delay, performance and interface risks to parties capable of managing them.
At minimum, test:
Until full diligence:
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