Course on Investment-grade Calculation, Forecasting and Analysis of RE and EE Projects

1. Introduction

The Regional Center for Renewable Energy and Energy Efficiency (RCREEE) in cooperation with GIZ, the Egyptian Ministry of Electricity and Renewable Energy and the New and Renewable Energy Authority (NREA) are organizing a three-day intensive training course on dynamic investment-grade calculation, forecasting and feasibility analysis of Renewable Energy and Energy Efficiency projects in Arab countries and a technical visit to strengthen Arab experts’ skills and knowledge and to enhance their expertise in economic profitability assessment of RE and EE projects.

The training course is designed for RE and EE business and strategy analysts, project developers and manager, Energy policy makers, planners, bankers and senior professionals who aim to enhance their knowledge and experience in evaluating energy production and savings, costs, financial viability and risk for various types of RE and EE technologies.

The program to be held in Cairo from 12 to 15 May 2015 includes a hands-on course on the Excel-Tool for Investment Grade, Calculation, Fore­casting and Analysis of RE and EE projects developed by GIZ and a technical visit to a RE power plant in Egypt.

2. Background

Within the current Arab’s energy context characterized by the considerable increase in energy consumption including electrical demand (between 4 to 8% annually), the decline of natural resources and the instability of fossil resources prices and future availability, many Arab countries adopted ambitious RE and EE strategies based on appropriate management of natural resources and the diversification of energy supply beside the up-scaling of RE and EE programs at regional level.

The ambitious RE targets and the large scale EE programs will need a huge investment for their implementation and an effective financial management beside the establishment of adequate infrastructure that includes all deployment components including institutional, regulation, financial, and capacity development measures.

Capacity development needs in the Arab region both technical and financial knowledge to ensure the cost effective planning of future sustainable development projects and recent capacity development survey conducted by RCREEE identified skills gaps in key areas related to RE and EE project feasibility study/risk assessment and project financing and bankable documentation.

The profitability of RE and EE projects and the implementation of appropriate financial mechanisms are among the main driver to promote and accelerate RE and EE deployment and create the adequate environment to mitigate investment risks for public and private sectors.

For this purpose and in order to support Arab countries and enhance national and regional knowledge and expertise, RCREEE in cooperation with GIZ is organizing a training course on dynamic investment grade calculation to introduce and present investment market context, economic fundamentals and project cost drivers and key risks. The course will also be an opportunity to share case studies and practice financing model tool by calculating own projects and to visit a RE power plant in Egypt.

3. Objective

The on-hands training course will provide a financial Excel tool and aims to build regional expertise and knowledge in Arab countries on how to calculate the cash-flows of energy contracting projects (performance and supply contracting), based on energy efficiency and renewable energy technologies.

After the end of the course, the participants will gain in-depth introduction and understanding of the following topics:

  1. Economic and financial aspects of RE and EE projects
  2. Project life cycle cost concept and basics of dynamic economics calculation for comprehensive EE & RE investment projects
  3. Economic, financial & bankability concepts
  4. RE and EE financial risks and how to evaluate, mitigate and avoid these risks
  5. Standards aspects of bankable RE and EE projects
  6. Investment grade calculation tool for RE and EE complex projects
  7. Calculating own energy performance/energy supply contracting projects
  8. Business evaluation models of RE and EE programs and project returns and risks

Gaining these knowledge and skills beside analysis and practices of real examples and case studies will provide an overview of how to calculate annual energy output, costs and revenues of RE and EE projects and how to deal with risks related to these projects. Furthermore, participants will learn in depth how to use and execute financial Excel-Tool for Investment Grade Calculation, Forecasting and Analysis of RE and EE Projects developed by GIZ.

4. Logistic arrangement

  4.1 Organizers:

  • Egyptian Ministry of Electricity and Renewable Energy
  • New and Renewable Energy Authority (NREA)
  • Regional Center for Renewable Energy and Energy Efficiency (RCREEE)
  • German Development Cooperation (GIZ) GmbH

  4.2 Date and location:

  • Duration: 3 days intensive training course and one day for a technical visit
  • Date: 12-15 May 2015
  • Venue:  Cairo-Egypt

  4.3 Level and target group:

The training course is an advanced training designed for RE and EE business and strategy analysts, project developers and manager, Energy policy makers, planners, bankers and senior professionals who are involved in formulating and implementing RE and EE projects.

The course is also relevant to a wide variety of governmental and nongovernmental organizations in the energy sector, including private companies, utilities, Energy Service Companies (ESCOs), financial institutes, universities, research institutes, developmental agencies and others, which are involved in policy making, financial analysis and cost effective studies.

Background knowledge required for the training course is mainly having technical and/or economical education with regards to the energy business and basics on Microsoft Excel.

Estimated number of participants is 20 to 25 persons. Participants have to provide their own laptops.

  4.4 Calculation of own projects

A major part of the training is to calculate own projects with the provided Excel-Tool. Therefore, participants are encouraged to bring and discuss their case studies with the experts. The following project data is required:

  • Project: Story outline
  • Baseline data: Energy (in MWh) and power demand (in kW)
  • Energy Costs: Electricity, fuels (high and low tariffs…all price categories)
  • Energy Efficiency measures and related savings (in MWh or % from baseline)
  • Lifecycle cost of measures: Investment (Capex), Operating & Maintenance, Insurance, Management and other costs (Opex)
  • Financing: Equity and Debt, Interest Rates, Loan Terms, Incentives
  • Project/Contract term

5. Content

The training course will present common definitions and core concepts of financial models beside providing skills needed to practice dynamic investment-grade calculation, forecasting and analysis tool developed by GIZ and energetic solutions.

The three days training course will cover the following topics:

  1. Energy efficiency and renewable energy markets deployment overview, market trends, prices, and forecasts;
  2. Energy efficiency policy and measures, market development for the respective technologies, costs and revenues;
  3. Basic economic and financial concepts and analysis of RE and EE projects: Projects structuring, resource assessment impact, energy output, cash flows, and how the various issues interact to determine project returns and risks;
  4. Incentive and innovative financing program supporting RE and EE development;
  5. Presentation of various financing models for EE and RE initiatives;
  6. Key Performance Indicators for bankable projects and adequate business plan preparation;
  7. Risk identification and analysis for RE and EE projects and risk mitigation measures;
  8. Introduction and presentation of dynamic economic calculation tool for RE and EE projects as well as energy performance and energy supply contracting
  9. Case studies and practical session using GIZ tool based on real data of own projects.

The attendees will benefit from interactive workshop with a focus on a practice-oriented hands-on training and exercises tailored to RE and EE economic and financial calculation and from an onsite visit to a RE power plant in Egypt.

6. Support material

Training support material includes:

  • PowerPoint presentation of the training course;
  • Detailed cases studies and examples;
  • Assessing framework conditions for energy service companies guideline;  
  • GIZ Excel financial tool
  • GIZ Excel tool manual;

Training course materials will be presented in English.

7. Training provider

Mr Jan W. Bleyl (energetic solutions) and Mr Simon Zellner (GIZ Advisor Energy Efficiency) will ensure the training course. Instructors have significant experience and knowledge in financial modeling of RE and EE projects and have been active in providing training courses in this regards at regional and international level.