Operating cash flow positions

Operating cash flow forecasts should reflect …

Terminal-year cash flow

Which of the following can be considered a terminal year cash flow?

Revenue calculation

Why are power purchase agreements (PPAs) important for renewable energy projects?

Initial investment outlay

Which of the following is not considered a project investment cost item?

Export credits

Considering credit insurance from export credit agencies (so called ECA-cover), which of the following statements are correct?

Export Credit Agencies (ECAs) – direct lending

Starting the project financing phase

Project initiators (“sponsors”) should start to talk to prospective financing banks as early as possible.

Risk

A RE project investor in the Romanian market tells you that his bank requires an interest rate of 8.9%. If the base rate is 5.8%, how high is his credit risk premium?

Bankability assessment

Assume that there are two comparable RE project finance transactions between which a bank can choose to provide financing to. Project A has an expected financial value (µ) of TEUR 900 and an uncertainty (σ) of 19%. Project B has an expected financial value (µ) of 820 TEUR and an uncertainty (σ) of 10%. 

Which of the two do you think the bank will prefer, provided no problems have been identified in the bankability assessment of either project?

Risk and uncertainty

What is the difference between risk and uncertainty?