Project Term Debt

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hhundt
Topic Author

06 Nov 2019 17:47 #7770 by hhundt

Project Term Debt was created by hhundt

Hi,

Looking around at the resources and couldn't find clarification on some inputs in Project Term Debt for detailed PV Third-Party Ownership Host/Developer scenario:

Are these inputs, such as Up Front Fee and Annual Interest Rate apply to developers' costs or hosts costs? Or another way of putting it, do these items add costs to the host because they are additional costs accrued by the developer in securing funding or is this apart of the fees set up by the developer for the project to be applied beyond the PPA?

As a note: we are using Solution Mode, IRR target. We had baked the developer fee into the System Cost Indirect Capital Costs variables.

Hope this makes sense

Thanks,

Henry

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Paul Gilman

06 Nov 2019 23:05 #7772 by Paul Gilman

Replied by Paul Gilman on topic Project Term Debt

Hi Henry,

All of the project costs are costs to the developer, including debt costs such as the up-front fee and annual interest. You can see the impact of those costs on the developer's cash flow by looking at the table on the Cash Flow tab on the Results page.

To avoid double-counting, be sure that any costs or fees that you include in the capital costs on the System Costs page are not also included on the Financial Parameters input page. The items under "Developer Cash Flows from Investing Activities" on the Cash Flow tab in the results should help you keep track of those costs.

Although these are costs to the developer, they indirectly affect the host because they have an impact on the PPA price that the developer would need to negotiate to meet its IRR target.

Best regards,
Paul.

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