BIOGAS POWER PLANT PROJECT Business Process, Due … · OUTLINE Small Scale ... dari proposal...
Transcript of BIOGAS POWER PLANT PROJECT Business Process, Due … · OUTLINE Small Scale ... dari proposal...
10/26/2016 1
BIOGAS POWER PLANT PROJECT
Business Process, Due Diligence and Risk
Management
USAID ICED II
Belitung, 26 October 2016
OUTLINE
Small Scale Commercial Biogas Power Plant Business
Commercial Biogas Power Project Development
Biogas Power Project Due Diligence
Risks Analysis and Management
PLTBG= Pembangkit Listrik Tenaga Biogas
Small Scale Commercial Biogas Power Plant Business
BIOGAS DARI POME PLTBG 20 kV, 50 Hz, 3 PhaseJTR 400 V, JTM 20 kV, Transmisi diatas 20 kV
IDR/USD as FIT Regulation
Energi Primer/
Sumber Energi Terbarukan
Teknologi Pembangkit Listrik
Tenaga ListrikTitik Koneksi,
Jaringan Listrik PLNPembayaran PLN
Pembelian/ Pengadaan Energi
Primer
Konversi Energi Primer Menjadi Energi Listrik
ProdukPenjualan &
Penyaluran ProdukRevenue/
Penghasilan
Resources Resources Owner Developers Mechanism
BOOT/BOT approach requires
Legally Binding Agreements on:
• Land Use
• Delivery of waste stream
• Energy supply and purchase
Key Benefit of BOOT/BOT approach:
• Reduces many financial risks for “Host” company of implementing an
improved energy system
• Reduce energy costs in the near term, during BOOT period, and significantly
over the long term after transfer of assets
• Improves Environment around mill
Small Scale Commercial Biogas Power Plant Business
Model
FEEDSTOCK (POME)Private / BUMN /
Public
Resources Owner
Third Party
Project Developer
Own Project
(In-House or Turn-Key)
BOO Scheme
(Built-Own-Operate)
BOOT Scheme
(Built-Own-Operate-Transfer
OUTLINE
Small Scale Commercial Biogas Power Plant Business
Commercial Biogas Power Project Development
Biogas Power Project Due Diligence
Risks Analysis and Management
Studi Lingkungan
Studi Interkoneksi
Pengurusan Ijin, Akusisi
Lahan
Pra-Studi
Kelayakan/Pr
e-FS/FS
Konsep/ Basic Desain
Perijinan & Lahan
Equitas
PJBL/PPA
EPC Kontrak Draft
O&M Kontrak Draft
Fuel Supply Agreement
Draft
Financing
Detail Engineering
Design
Procurement
Construction
COD
Production
Design & Planning Stage Construction StageOperational
Stage
Kualitas Basic Design & Planning yg baik menentukan
tingkat kelayakan finansial, ekonomi, dan lingkungan
dari proposal bisnis
Project Management dan Kontraktor
yang berkualitas menentukan
suskes tidaknya tahap konstruksi
3 ~ 6 bulan 6 ~12 bulan
12 bulan
12 ~ 18 bulan
Commercial Biogas Power Project Development:
Project Stages
O & M
RISK MANAGEMENT and DUE DILIGENCE MUST BE DONE IN ALL STAGES OF THE PROJECTS!!
Typically 15 ~ 20 years
1. Pre-FS and & Interconnection Study
2. Raise Seed Equity
3. Feasibility Study
4. Obtain Local Permits
5. Feedstock Supply Agreement (FSA)
6. Power Purchase Agreement (PPA) with PLN
7. EPC Contract & O&M Contract
8. Land Acquisition
9. Obtain balance of permits & License
10. Raise balance of equity
11. Obtain debt financing
12. Financial Closure
13. Implement construction work
14. Test Run and COD
15. Operation Stage
16. Project Transfer or Decommissioning
Commercial Biogas Power Project Development:
Project Timeline
3 - 6 months 6 - 12 months 6 - 12 months 12 – 18 months Typically 15 ~ 20 years
OUTLINE
Small Scale Commercial Biogas Power Plant Business
Development of Commercial Biogas Power Project
Due Diligence of Commercial Biogas Power Project
Risks Analysis and Management
9
Due Diligence Process
Independent Engineering Consultant
Independent Environment & Socio-
Culture Consultant
Independent Law Consultant
Independent SpecilistIndependensi, kerahasiaan, bebas dari konflik
interest, quality & control risk management control
adalah kunci suksesnya due dligence yg berkualitas
konsultan ahli project
biogas yang
berpengalaman
nasional/internasional
konsultan ahli
lingkungan,sosio-kultur
harus nasional/lokal
konsultan ahli hukum
harus nasional
METODE DUE DILIGENCE DALAM TAHAP DESIGN &
PLANNING (GREEN FIELD TYPE PROJECT)
cek semua aspek teknis
desain, analysis, metode
dan data apakah valid?
cek semua aspek lingkungan
& sosial apakah ada
rencana mitigasi & alokasi
risk yg jelas?
cek semua aspek yg berkaitan dengan legalitas
contract,perizinan, hukum apakah ada masalah?
spesialis ahli project biogas yang
berpengalaman nasional/internasional
cek semua aspek teknis yang
spesifik apakah ada masalah?
DETAIL DESK REVIEW &
ASSESMENT
FIELD REVIEW/CHECK
10
Due Diligence Process
Independent Engineering Consultant
Independent Environment & Socio-
Culture Consultant
Independent Law Consultant
Independent SpecilistIndependensi, kerahasiaan, bebas dari konflik
interest, quality & control risk management control
adalah kunci suksesnya due dligence yg berkualitas
konsultan ahli project
biogas yang
berpengalaman
nasional/internasional
konsultan ahli
lingkungan,sosio-kultur
harus nasional/lokal
konsultan ahli hukum
harus nasional
METODE DUE DILIGENCE DALAM TAHAP DESIGN &
PLANNING (GREEN FIELD TYPE PROJECT)
cek semua aspek teknis
desain, progress project,
dan output apakah sesuai
dengan desain?
cek semua aspek lingkungan
& sosial apakah ada
rencana mitigasi & alokasi
risk yg jelas?
cek semua aspek yg berkaitan dengan
legalitas, contract, perizinan, hukum apakah
ada masalah?
spesialis ahli project biogas yang
berpengalaman nasional/internasional
cek semua aspek teknis yang
spesifik apakah ada masalah?
DETAIL DESK REVIEW &
ASSESMENT
DETAIL FIELD REVIEW &
ASSESSMENT
Questions need to be answered:
• Is the project developer a credible, experienced and financially
capable to develop the proposed project design?
• Is the project proposal complete, qualified, and feasible?
• Is the project location properly selected and located?
• Is there any issue related to land right, environment and social
related to project site?
PROPER DUE DILIGENCE
PROPER DUE DILIGENCE
DETAIL DESK REVIEW & ASSESSMENT of PROJECT DEVELOPER and PROJECT PROPOSAL + FIELD REVIEW/CHECK
DETAIL DESK REVIEW & ASSESSMENT of PROJECT DEVELOPER and PROJECT PROPOSAL + DETAIL FIELD REVIEW &
ASSESSMENT
Questions need to be answered:
• Is the project developer a credible, experienced and financially
capable to finish the proposed project construction/operation?
• Is the project detail design complete, qualified, and constructible?
• Is the project location properly selected and located?
• Is there any issue related to land right, environment and social related
to project site?
GREEN FIELD TYPE PROJECTS
BROWN FIELD TYPE PROJECTS
TUJUAN:1. Mengindentifikasi gap atau resiko yang ada pada proposal investasi yang
diajukan oleh pengembang proyek.
2. Mengundang pengembang proyek untuk melakukan proper mitigasi dan
proper alokasi resiko yang berhasil diindentifikasi dalam proses DD.
MANFAAT: Mendapatkan proposal proyek dan pengembang proyek yang dapat
diandalkan dalam mengembangkan/mewujudkan proyek.
Note:Due Diligence/Uji Tuntas adalah suatu proses yang berulang yang harus dilakukan oleh
lender/investor untuk sampai pada tahap dimana lender/investor yakin dan puas bahwa
tidak ada lagi gap/resiko signifikan pada proposal proyek yang diajukan oleh pengembang
dan lender/investor yakin bahwa pengembang akan mampu mewujudkan proyeknya
sesuai dengan target dan jadwal yang ditentukan, dan project tersebut mampu beroperasi
dan menghasilkan revenue sesuai dengan yang diperkirakan sehingga pada akhirnya
lender/investor sampai pada keputusan untuk membiayai proyek.12
TUJUAN DAN MANFAAT DARI DUE DILIGENCE
(DD)/UJI TUNTAS
Aspect of Structure Type of The Project
Aspect of Project Company & Sponsor
Aspect of Contractual Structure
Aspect of Technical (Engineering Design & Construction)
Aspect of Environment and Social Culture
Aspect of Financial
13
ASSESSMENT OF VARIOUS KEY ASPECTS IN THE DUE
DILIGENCE
LIMITED RESOURCE STRUCTURE, PROJECT FINANCING
FUEL SUPPLIER
LENDERS
MAIN CONTRACTOR
INSURANCE COMPANY
O & M OPERATOR
HOST GOVERNMENT
POWER PURCHASER
PEMEGANG SAHAM
Partner 1 Partner 2Other equity
investors
Sub-contractor
Power Purchase Agreement
Fuel Supply Agreement
Construction Contract O & M Contract
Loan AgreementPermits & Licenses
Insurance Agreement
Shareholder’s Agreement
ProjectVehicle
Loan Proceeds
Limited Guarantees
“Deliver or pay
Agreement”“Take or/& pay
Agreement”
ASPECT OF STRUCTURE PROJECT (1)
Permits (IUPTL, Principal
Permit, IMB, UKL-UPL, Etc)
PLN
EPC
LENDERS
MAIN CONTRACTOR
POWER PURCHASER
Sub-contractor
Power Purchase Agreement
Construction Contract
ProjectSponsor
Loan Proceeds
“Take or/& pay
Agreement”
Loan Agreement
Loan Proceeds
Sales Proceeds
Loan Repayment
15
ASPECT OF STRUCTURE PROJECT (2)
FULL RESOURCE STRUCTURE, BALANCE SHEET FINANCING
PLN
EPC
A small commercial project: The capacity of small scale Biogas Projectcapacity is around 0.5 MW to 3 MW.
A dedicated Power Plant: A small scale IPP Biogas Power Plant thatconnects and serves to PLN as a Sole Of Taker within “TAKE OR PAYPPA” type or “TAKE AND PAY PPA” type.
Project Sponsor generally has Equity around 20-35% of totalinvestment cost and Lender provides Loan for the rest.
Project Company may use single EPC (turn key) contractor or somedifferent contractors for project construction.
Project Company may use different O & M contractor(s) to Operateand Maintenance the Biogas Power Plant.
All agreements or contracts are significant for project risk allocations
BOO/BOT/BOOT agreement is complicated. All related parties arelooking for the best deal structure for the agreement.
GENERAL CHARATERISITICS
Aspect of Structure Type of The Project
Aspect of Project Company & Sponsor
Aspect of Contractual Structure
Aspect of Technical (Engineering Design & Construction)
Aspect of Environment and Social Culture
Aspect of Financial
17
ASSESSMENT OF VARIOUS KEY ASPECTS IN THE DUE
DILIGENCE
Lakukan Audit/Investigasi pada Project Company dan Sponsor
pada:
Besarnya presentase saham masing-masing partner dalam project
Pengalaman partne & sponsor utama dalam pengembangan proyek
Role masing-masing masing-masing partner dalam project
Cek Share Holder Agreement/BOO/BOT/BOOT Agreement: Perjanjian
yang ada diantara partner (struktur, prosedur voting, dll)
Apakah sponsor utama memiliki dokumen legal yang cukup?
Financial Statement proyek (Proforma) dari sponsor utama
Struktur Manajemen Proyek, CV manager dan board member
Strategi corporate dan kebijakan manajemen finansial sponsor (termasuk
rasio finansial, dividend policy, dll)
Rencana pengembang untuk akses ke sumber-sumber pendanaan jika
sponsor kekurangan ‘equity’ dimasa yang akan datang.
Review/Assessment of Project Company & Sponsor
Flow Diagram to review/assess the Strength of Project
Company & Sponsor in the Project Development
No Due Diligence Item Informasi Yang Diperlukan Check
1 Shareholders and percentage of
ownership of each shareholder in
the Project Company
Project Company Name : PT. XYZ
Share holders:
a. Share holder 1 : ? %
b. Share holder 2 : ? %
c. Share holder 3 : ? %
d. Share holder 4 : ? %
2 Corporate Licenses a. Approval Letter of Foreign Capital Investment ("SP-PMA")
b. MOLHR approval of the IPP’s deed of establishment.
c. Certificate of Domicile issued by the Head of Sub District.
d. Registration of the Deed of Establishment with the DOT.
e. Corporate Financial Year Reports
f. Report on Domestic and Foreign Capital Investment
Activities
3 Shareholders review a. Shareholders Agreement
b. Shareholders structure changes
c. Shareholders ‘s structure changes
d. Voting procedures
Yes No
Example Check list for DD of Project Company & Sponsor
(1)
No Due Diligence Item Informasi Yang Diperlukan Check
4 Company Management Review a. CV of each manager
b. CV of each board member
c. Relevance of background experience
5 Proforma review a. Project assumptions are reasonable
b. Financial model is audited.
c. Sensitivity/scenario analysis conducted to weigh various risks.
d. Cost & production structure is appropriate from technical
perspective.
e. Technical specialists are involved in the analysis
6 Project sponsor experiences a. Experiences in RE power projects in Indonesia
b. Experiences in the similar/same power projects
c. Experiences in RE power projects in overseas
7 Project sponsor corporate
strategy
a. Financial management policy (financial ratios, dividend policy)
b. Plan to access the equity market/investors in the future
c. Plan for developing future projects
Example Check list for DD of Project Company & Sponsor
(2)
Aspect of Structure Type of The Project
Aspect of Project Company & Sponsor
Aspect of Contractual Structure
Aspect of Technical (Engineering Design & Construction)
Aspect of Environment and Social Culture
Aspect of Financial
22
ASSESSMENT OF VARIOUS KEY ASPECTS IN THE DUE
DILIGENCE
Lakukan Investigasi pada seluruh kontrak/perjanjian yang meliputi:
Purchase Power Agreement (PPA)
Kontrak EPC, atau kontrak-kontrak dengan seluruh kontraktor.
Fuel Supply/POME Supply Agrement
Kontrak Operation & Maintenance (O & M)
Kontrak servis dan maintenance jangka panjang (Long-Term Services
Agreement – LTSA) dengan suplier peralatan (jika ada)
Perjanjian jual beli/sewa tanah
Rencana persiapan Jaringan listrik dan Interkoneksinya ke grid PLN
Asuransi (Construction All Work, business interruption, third party
liabilities, dll.)
Review/Assessment of Project Contractual Structure
No Due Diligence Item Informasi Yang Diperlukan Check
5 Land-lease agreement review a. Agreement in place ?
b. Located in protected forest land?
c. Any guarantee on available capacity
d. Fair reward and penalty clause on meeting contracted
capacity
6 Interconnection and distribution
line arrangement review
a. Interconnection requirements
b. Agreement and planned facilities
c. Testing and Commissioning Date & Procedures
d. Interconnection point review
e. Transaction point review
f. Power meter review
7 Project insurance program a. Construction insurance all work
b. Business interruption insurance
c. Third party liabilities
Yes No
Example Check list for DD of Contractual Structure of The
Project (1)
No Due Diligence Item Informasi Yang Diperlukan Check
1 PPA review a. PPA in place ?
b. Type of PPA contract: (take-or-pay contract)?
c. Any guarantee on available capacity
d. Fair reward and penalty clause on meeting contracted
capacity
2 EPC contract review a. EPC contract or not
b. EPC salient features:
c. - Warranty
d. - Lump sum
e. - Cost plus fee
f. Match with PPA
3 O & M contract review a. O & M contract in place?
b. Match with PPA
c. LTSA with equipment suppliers
4 Fuel Supply Agreement (in case of
biomass/biogas projects)
a. FSA in place?
b. Supply guarantee
c. FOB/CIF price structure
d. Review of transportation methodology
Yes No
25
Example Check list for DD of Contractual Structure of The
Project (2)
Aspect of Structure Type of The Project
Aspect of Project Company & Sponsor
Aspect of Contractual Structure
Aspect of Technical (Engineering Design & Construction)
Aspect of Environment and Social Culture
Aspect of Financial
26
ASSESSMENT OF VARIOUS KEY ASPECTS IN THE DUE
DILIGENCE
No Due Diligence Item Note
1 Identify, evaluate & review Design Criteria Document
2 Check , evaluate and review Project Access Plans & related Issues
3 Evaluate & review POME and BIOGAS analysis
4 Evaluate & review energy analysis
5 Evaluate & safety design and analysis
6 Evaluate & review topographic studies
7 Evaluate & review geotechnical analysis
8 Evaluate & review M& E Equipment quality and specification
9 Evaluate & review Project Drawings
10 Evaluate & review Cost Estimate & cash flow, and Project scheduling
11 Evaluate & review design of transmission & interconnection system
12 Evaluate & review Project organization & quality control and O&M plan
Example Check list for DD of The Technical Aspect (1)
No Due Diligence Item Informasi Yang Diperlukan Check
1 Identified risks and mitigation plan
development
a. Has the project company done it?
2 Feasibility Study Review a. Is FS in place?
b. Is FS updated with the newest information?
c. Review of project layout
d. Review of general design
e. Review of DED by Technical specialists/consultants
3 Project Organization review (during
construction and operational
phases)
a. Key management post s are filled
b. Key management competency are relevant
4 Technology issues review a. POME & BIOGAS study review
b. Feedstock availability and security supply study
c. Choice of technology review
d. Choice of equipment suppliers review
e. Choice of contractors review
f. Choice of DED consultant review
Yes No
28
Example Check list for DD of The Technical Aspect (1)
Aspect of Structure Type of The Project
Aspect of Project Company & Sponsor
Aspect of Contractual Structure
Aspect of Technical (Engineering Design & Construction)
Aspect of Environment and Social Culture
Aspect of Financial
29
ASSESSMENT OF VARIOUS KEY ASPECTS IN THE DUE
DILIGENCE
Lakukan Investigasi pada aspek lingkungan dan sosial yang meliputi:
Kewajiban dan perijinan untuk memenuhi persyaratan lingkungan untuk
semua fasilitas proyek (AMDAL/UKL/UPL)
Dokumen AMDAL/UKL/UPL, apakah ada isu kritis lingkungan dan sosial
spesifik yang harus diperhatikan didalam pengembangan dan pengoperasian
PLTA. Apakah sudah diperhitungkan biaya yang mungkin timbul?
Aktivitas dan prosedur konsultasi publik: apakah sudah dilakukan atau
direncanakan? Bagaimana hal yang menjadi perhatian utama publik
dipertibangkan didalam dokumen AMDAL/UKL/UPL? Apakah ada protes
atau publisitas negatif untuk pembangunan proyek?
Tingkat pemahaman masyarakat terhadap manfaat PLTA
Review/Assessment of Environment & Social Aspects
No Due Diligence Item Informasi Yang Diperlukan Check
1 Review AMDAL/UKL-UPL a. AMDAL/UKL-UPL in place?
b. UKL/UPL addresses and mitigates the environmental and
social risks
c. Critical socio-environmental issues addressed for project
development and operation
d. Critical socio-environmental issues reflected in the project
cost
2 Review description of project facilities a. Is there any potential risk that may affect project design
and investment and/or operational costs?
3 Review if public consultation
procedures and activities
a. Are the procedures and activities have been completed (or
planned)?
b. Review key public concerns and how they are addressed
in project planning/AMDAL documents
c. Have there been any protests or negative publicity
regarding the project?
4 Review support from the local
communities
a. Does the local communities understand the benefit of the
development of RE project for them
Yes No
31
Example Check list for DD of The Environment and Social
Aspect (1)
Aspect of Structure Type of The Project
Aspect of Project Company & Sponsor
Aspect of Contractual Structure
Aspect of Technical (Engineering Design & Construction)
Aspect of Environment and Social Culture
Aspect of Financial
32
ASSESSMENT OF VARIOUS KEY ASPECTS IN THE DUE
DILIGENCE
No Due Diligence Item Note
1 Review rincian detail biaya proyek
(termasuk rincian biaya kontrak EPC
dan contingency
Konsultan independen harus mereview apakah detail
biaya proyek sudah diperkirakan dengan akurat.
Memastikan bahwa lingkup kerja kontraktor dan supplier
sudah lengkap tanpa ada kekurangan atau contingeny
yang kurang tepat. Garansi penyelesaian dari semua
kontraktor
2 Review kemungkinan terjadi COST OVERRUNS (apakah diberikan skenario optimis dan pesimis
disamping skenario dasar, dan apakah diberikan juga
analisa sensitivitas & bagaimana rencana
mitigasinya?)
Selain alokasi contigengy budget didalam total biaya
proyek, bank dapat meminta sponsor untuk berkontribusi
pada contingency modal yang siap untuk dilepaskan/
diberikan ketika diminta oleh bank.
3 Bagaimana rencana pendanaan: terms for
subscription of shares by any other shareholder ;
terms of proposed bridge financing (if any); terms of
proposed senior debt financing
Bank, as the senior debt provider, needs to ensure that it
has the strongest lender’s security in the financing terms
4 Review detil asumsi yang digunakan: Asumsi Makroekonomi dan referensi asumsi yang
diambil.
Asumsi tersebut seharusnya realistik, tidak terlalu jauh
dari kondisi saat ini.Refernsi asumsi: Gunakan asumsi
dari sumber terpercaya APBN, BI dan BPS
5 Asumsi Finansial: suku bunga, financial fee, IDC,
Required ROR
Suku bungan dan financial fee harus dikonfirmasi dengan
sumber pendanaan.Praktek umum proyek: memasukkan
IDC dalam biaya investasi. - ROR harus reaslistik33
Review/Assessment of Financial Aspects (1)
No Due Diligence Item Note
6 Review financial model:•Investment and operational assumptions
•Energy sold and revenues; other revenues, if any (e.g.
carbon credit, steam, compost etc)
•Operational costs; administrative costs (salaries); O&M
costs; lease payments, etc
•Taxes
•Depreciation and amortization of assets
•Interest during construction
•Insurance
•Fees to be paid to the government, if any
•Assumptions related to current assets and current
liabilities
•Dividend pay out
•Capital expenditures
•Disbursement schedule
Check that the financial model assumptions,
costs and revenues are reasonable and
realistic (e.g. the price of CER/carbon credit);
comparisons may be made with other project
investments, best practices, or in accordance
with the accounting standard. The Bank will
take input from engineer about project output
and project cash flow
7 Review capital cost; major equipment,
civil work, mechanical and installation
work, transmission lines
Different technology supplier may cause
differences in capital cost (for example Chinese
technology typically has lower investment cost
compared to its European competitors).
Therefore comparing the technology and the
cost proposed in important.
Review/Assessment of Financial Aspects (2)
No Due Diligence Item Note
8 Review the project profitability and debt
service capacity (ratios, sensitivity and scenario
analysis, debt service coverage ratio)
Review that the project has adequate cash
flow to pay for the operational cost, debt
(interest and principal), taxes, and dividend
9 Review applicable PPA tariff (see if there’s any price
escalation over time, pass through of feedstock prices, etc).
Bank would want to ensure that PPA tariff
would be able to cover the project cost and
return on equity to project sponsor during the
term of the PPA
PPA tariff should be able to cover the
operational and maintenance cost that are
influenced by inflation
For biomass project, feedstock supply risk,
including prices should also be reflected in the
PPA tariff (however, the current price regime
does not provide a basis for tariff indexation.
35
Review/Assessment of Financial Aspects (3)
36
TYPICALL SMALL SCALE BIOGAS POWER PLANT
PROJECT: Project Cost ComponentCAPEX:
Project Development Cost: Permits, Overhead Cost, Study and Engineering Cost (Feasibility
Study, Interconnection Study, Feedstock Lab Test, Soil Test, UKL-UPL,
Basic Engineering Design)
EPC Cost: Site Preparation & Civil Work
Digester System, Piping & Flaring
Gas Cleaning & Pumps System
Gas-Engines & Generator
Controller & Electrical System
Balance of Plants
Grid Interconnection System
Other Cost (IDC & Insurance)
Financing Cost: Interest, Equity Return
Other Cost: Insurance, Tax, CSR, etc
OPEX: Operating Labor
General Administration & Others
Insurance
Digester Service & Maintenance
Gas Engine Service & Maintenance
Sources: World Bank, 2008
TYPICALL SMALL SCALE BIOGAS POWER PLANT
PROJECT: Project Cost Reference (Value in 2008)
Capital Expenditures:
Project Development Cost 2%
Site Preparation & Civil Work 5%
Digester System, Piping & Flaring 34%
Gas Cleaning & Pumps System 11%
Gas-Engines & Generator 17%
Controller & Electrikal System 10%
Balance of Plants 11%
Grid Interconection System 4%
Other Cost (IDC & Insurance) 5%
100%
Operational Expenditures:
Operating Labour 25%
General Administration & Others 14%
Insurance 5%
Digester Service & Maintenance 17%
Gas Engine Service & Maintenance 39%
100%
Project Cost Composition
Digester SystemUnit Cost / MW
(USD Million)
CAL System 1.5 – 3
CSTR System 2.5 – 3.5
Install Capacity CAL System Cost
1 MW 2,000,000
1.5 MW 2,500,000
2 MW 3,500,000
TYPICALL SMALL SCALE BIOGAS POWER PLANT
PROJECT: Project Cost Reference of Biogas Power Plant
No Due Diligence Item Information Check
1 Review the detailed breakdown of
total project costs
a. Detailed cost has been accurately estimated
b. The Contractor(s) and Supplier(s)work scopes have full
coverage without gaps or inadequate contingencies
c. Completion guarantees of all parties
2 Review the probability of cost
overruns
a. The contingent budget allocation in the total project cost
b. Project sponsor(s) to commit contingent equity
contribution, ready to be disbursed upon request by the
bank
c. Check optimist and pessimist scenario besides basic
scenario
d. Sensitivity analysis and mitigation plan
3 Financing plan a. Check the financing plan: terms for subscription of shares
by any other shareholder ; terms of proposed bridge
financing (if any); terms of proposed senior debt financing
4 Review detail assumptions used a. Macroeconomic assumptions and the references of the
assumptions taken.
Yes No
39
Example Check list for DD of The Financial Aspect (1)
No Due Diligence Item Informasi Yang Diperlukan Check
5 Financial assumptions a. Interest rate & financing fees should conform to the
proposed source of fund.
b. Include IDC in investment cost
c. Expected return of equity should be realistic compared to
current economic condition & market return
6 Review financial model a. Is financial model in place?
b. Financial model assumptions, costs and revenues are
reasonable and realistic
7 Review capital cost a. Is there any comparison of different capital cost at different
technology ?
8 Review the project profitability and
debt service capacity
a. The project has adequate cash flow to pay for the
operational cost, debt (interest and principal), taxes, and
dividend
Yes No
40
Example Check list for DD of The Financial Aspect (2)
No Due Diligence Item Informasi Yang Diperlukan Check
9 Review applicable PPA tariff a. There’s any price escalation over time, pass through of
feedstock prices, etc
b. PPA tariff would be able to cover the project cost and
return on equity to project sponsor during the term of the
PPA
c. PPA tariff should be able to cover the operational and
maintenance cost that are influenced by inflation
d. For biomass project, feedstock supply risk, including prices
should also be reflected in the PPA tariff
Yes No
41
Example Check list for DD of The Financial Aspect (3)
OUTLINE
Small Scale Commercial Biogas Power Plant Business
Commercial Biogas Power Project Development
Biogas Power Project Due Diligence
Risks Analysis and Management
43
Due Diligence Process
Independent Engineering Consultant
Independent Environment & Socio-
Culture Consultant
Independent Law Consultant
Independent Specilist
konsultan ahli project
biogas yang
berpengalaman
nasional/internasional
konsultan ahli
lingkungan,sosio-kultur
harus nasional/lokal
konsultan ahli hukum
harus nasional
ANALIS MANAJEMEN RESIKO PADA TAHAP DESIGN &
PLANNING
spesialis ahli project biogas yang
berpengalaman nasional/internasional
DETAIL DESK REVIEW &
ASSESMENT
FIELD REVIEW/CHECK
Resiko-resiko baru tambahan yg
terindentifikasi
Rencana-rencana baru Mitigasi
Resiko
Alokasi Resiko kedalam perbaikan Studi, Desain
Kontrak, dll.
Pengembangan proyek IPP
skala kecil adalah pekerjaan
yang melibatkan
IDENTIFIKASI, MITIGASI
dan ALOKASI RESIKO
proyek selama
pengembangan dan
pengoperasiannya.
ANALIS MANAJEMEN RESIKO UNTUK
PENGEMBANGAN PROYEK BIOGAS
TANPA DESIGN, CONTRUCTION, OPERATION & MAINTENANCE &
MANAGEMENT SAFETY YG TEPAT PROYEK BIOGAS DAPAT MUSNAH TERBAKAR !!
BANK harus memahami dan
memanajemen RESIKO
- Identifikasi Resiko
- Mitigasi Resiko:
Data yang akurat
Desain yang tepat
Lingkungan
Sosial
- Alokasi Resiko:
Contracts
Insurance
Management
Peran BANK dalam MANAJEMEN RESIKO
Seduction of "free money" from CDM
Development of new estates is a priority for many palm oil mill enterprises
Self-contained business generally not interested in local interaction
Limited sense of obligation to operate cleanly
Permit issues: Limited GOI support: incentive + permits
Long wait to obtain PPA
Significant deposits and demanding supply condition made by PLN
Unrealizable grid infrastructure
Lack of business trust between business entities
Term & Condition Lender for Loan Application cannot be fulfilled by
Returns generally not attractive to developers
CHALLENGES OF THE DEVELOPMENT OF BIOGAS
POWER PROJECT IN INDONESIA
THE OVERALL PROPER PROJECT PROPOSAL
Note: by making good choices will a project be viable. Optimal decisionsare necessary for a good return.
SUITABLE ANAEROBIC DIGESTION TECHNOOGY
SUITABLE GAS HANDLING & SCRUBBING TECHNOLOGY
HIGH RELIABILITY & PERFORMANCE RECIPROCATING GAS ENGINE
HIGH RELIABILITY GRID INTERCONNECTION
SUSTAINABLE SUPPLY OF FEEDSTOCK (POME, OTHER ORGANICS WASTE)
LONG LASTING, LOW COST INCOME STREAM + OTHER BENEFIT
+
+
+
+
=
ALIGN FINANCIAL EXPECTATIONS WITH REALITY
Capital cost of digester system...too much and it will slow
down the returns, say 30% total
Performance of biogas system...often overstated
Scrubber and gas handling .. must work well otherwise create
problems, say 20%
Gas Engines ...efficiency, reliability, focus on biogas,
maintenance support, parts cost, suggest 50% of total cost
(include transformer, control panel, MW switchgear)
Grid Connection requirement and cost…..often
underestimated
Electricification costs ...variable and underestimated
A biogas project is an infrastructure project ...simple payback
periode 5 year or longer
UNDERSTANDING COMMERCIAL BIOGAS PROJECT
RISKS Construction risks, process performance risks, operating risks
Risk management theory says: P(sucess) + P(failure) = 1
P(success)= high standards of gas yield, high performance, financial return, safe
operation
Resource of time, money, know-how are scarce, and there is competition
Wisely allocate scarce resources to increase P(success) or decrease P(failure)
Example of ways to increase P(success):
choose commercially proven technology
select good quality equipment
hire (possibly more expensive) qualified consultant
Examples of ways of decrease P(failure):
ensure senior management commitment
independent project assessment
detailed checking and review during construction
maintain effective communication
Key area:
- POME & Biogas analysis
- Geoteknik
- Project Layout
- Equipment
- Project Budget
- Logistik
- Distribusi listrik dan interkoneksi jaringan
Perencanaan dan Desain
yang tepat:
- Perizinan yang lengkap
- Kriteria desain berkualitas
- Analisa resiko kebakaran,
longsor, gempa bumi dan
desain pencegahannya yang
lengkap.
- Rencana pengoperasian,
pemeliharaan dan perawatan
yang lengkap & terjadwal
Identifikasi Mitigasi
Resiko proyek di
alokasikan melalui
KONTRAK-KONTRAK:
- BOO/BOT/BOOT
agreement
- EPC contract
- Owner Financial Ability
- Insurance
- PPA
- Land Contracts
- Engineer
- Local Authorities
Alokasi
RESIKO DALAM PENGEMBANGAN PROYEK BIOGAS (1)
MANAJEMEN RESIKO penting dalam Kontrol Biaya dan Pendapatan Proyek
BANK SEHARUSNYA TIDAK MENERIMA RESIKO YANG BELUM
DIALOKASIKAN
- Detail POME & BIOGAS Analysis
- Analisa Geoteknikyang cukup akurat
- Concept Design
- Batasan Lingkungandan Sosial
- Local Political Risk
- Kebutuhan Equity
Akses Kapital yang cukup
Perencanaan dan target
yang realistis
Analisa Engineering yang
lengkap
Desain dilaksanakan oleh
Konsultan yg kompeten
Estimasi biaya yang
masuk akal dan lengkap
Securing Land Rights
Identifikasi Mitigasi
Equipment Contract with
reliable supplier
Fixed price contract(s) for
Civil Works and
Installation
Proper Property Rights
Enforceable PPA
Completed Permits
Sufficient Capital -
Proper Project
Contingency
Quality Control
Alokasi
RESIKO DALAM PENGEMBANGAN PROYEK BIOGAS (2)
RESIKO KONSTRUKSI DALAM PENGEMBANGAN
PROYEK BIOGAS
RESIKO EQUIPMENT/PROCESS PERFORMANCE
RESIKO OPERASI
CONTOH RESIKO PROYEK KETIKA DALAM TAHAP
KONSTRUKSI DAN PENGOPERASIAN: KEBAKARAN
CONTOH RESIKO PROYEK KETIKA DALAM TAHAP
KONSTRUKSI DAN PENGOPERASIAN: INSTALASI LINING
COVER LAGOON YG TIDAK TEPAT
Tahap Konstruksi:
– Unexpected conditions
– Design Changes
– Delays
– Delivery Delays
– Commodity Prices
– Contractor financial problems
Tahap Pengoperasian, Perawatan dan Pemeliharaan:
– Hyper-inflation
– Excessive repairs or replacement
– Design related problems
Resiko Biaya dalam pelaksanaan Konstruksi dan
Pengoperasian Proyek
Kapasitas terpasang, instalasi, pengoperasian,
pemeliharaan dan perawatan pembangkit
Total volume BIOGAS yang tersedia – Analisa POME
DAN BIOGAS
Total efficiency (including unit efficiency and losses in the
system)
Kerugian karena transmisi listrik dijaringan
Kehandalan Pembangkit
Currency/Inflation
Resiko-resiko kunci terhadap
Pendapatan Proyek (Revenue)
DR. Hanny J. Berchmans
Clean Energy Project Development Consultant
USAID ICED – Indonesia Clean Energy Development II
Implemented by
Tetra Tech | Complex World, Clear Solutions™
Menara Jamsostek, North Tower 14th Floor | Jl. Gatot Subroto No. 38 | Jakarta12710 INDONESIA
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