Zelya Energy intervenes with hydroelectric power plant owners for the sale of their shares. We help them determine the value of their assets, accompany their negotiations and bring our experience and our investor network, which includes large groups and institutional investment funds.
Zelya Energy prepares the presentation file of your power plant which will serve as support throughout the sale negotiations and which will be sent to all potential buyers. For this type of transaction, the documents to be prepared are very precise: our experience of projects and transactions will allow you to build a solid file.
In parallel, our analysts prepare with you the financial models (Base Case models) necessary for negotiations and for estimating the selling price.
Once the file has been sent to potential buyers, Zelya Energy organizes the data room, site visits, management presentation, while ensuring the smooth running of the acquisition audit and respecting confidentiality.
We also accompany you for the formalization of the letter of intent (or Term sheet) and to set the bases on which the transaction will be made (valuation, payment terms, financing and guarantees).
Zelya Energy acts on behalf of operators, investors and lenders in various areas of expertise related to hydroelectricity and finance (Audit, Valuation, WACC...).
Our experts have between 10 and 30 years of experience in the energy sector, including hydroelectricity. They are knowledgeable in both small run-of-river power plants, ranging from about 500 kW to a few MW, and large dams with capacities of up to 100 MW.
We have expertise in regulatory matters, production simulation, connection issues, and the analysis of rehabilitation project concerns.
Our teams are responsive and show excellent writing skills, essential both for project finance stakeholders and private equity investors. Their analysis is based on precise and exhaustive reviews of essential issues such as the regulation of hydroelectric production, water development, the environment and mechanical, hydraulic and electrical equipment.
Once the various sources of risk have been reviewed, our recommendations also focus on the conditions precedent for investment that will enable them to be controlled.
Due diligence involves validating the technical and regulatory assumptions that feed the financial evaluation model of a company or project: what is the probable evolution of actual flow and associated output? What is the plant's availability rate? How to explain incidents of underperformance? Is the connection to the electrical network optimal?
The technical and regulatory expertise of our consultants gives them the critical capacity needed to analyse business plans, drive audits necessary to verify installations, and provide an opinion on the quality of operation and maintenance.
This expertise plays a crucial role for a calm evaluation of the risks associated with an acquisition, for the protection of our clients by recommending suspensive investment conditions, and for adequately feeding the elements of economic models that serve as the basis for their evaluations.
Validation of the site, deposit, choice of equipment and wiring diagram
Analysis of administrative procedures, authorizations and water rights and environmental constraints
Validation of producible assumptions and selling rates
Modelling and financial valuation
Performance analysis, risk of failure, insurance conditions and O&M
Recommendations on the suspensive conditions of investment
Regulatory due diligence involves assessing regulatory risks for the new buyer and making recommendations on steps to take and associated suspensive clauses, to secure operating rights.
This service generally includes the following topics :
Verification of the validity and compatibility of electricity purchase and certificate contracts with the technical characteristics of the plant ;
Analysis of servitudes, environmental constraints and water rights (VNF, water regulation) ; Verification of their consistency with the production history and the expected future production.
For the connection of the power plant to the networks : verification of the technical and financial proposal or the connection agreement, as well as the network access contract ;
Evaluation of the risks and costs of land contracts securing the base of the power plant / Analysis of the general and specific conditions of access and ownership rights guaranteeing the enjoyment of the operation ;
Analysis of the authorizations and permits held by the operator / Verification of the conformity of these titles with the current and future operating conditions (environment, reserved flow, noise, safety, construction and operation) ;
These topics are often supplemented by an analysis of operation and maintenance contracts, as well as insurance policies. Indeed, this allows to check to what extent these contracts and policies allow to obtain an optimal guaranteed output.
Based on the analysis of these documents, a report is delivered. It contains an evaluation of regulatory risks, recommendations on additional steps to be taken and on suspensive clauses enabling to secure essential rights.
Technical due diligence of operating or developing power plants complements regulatory due diligence. It aims to validate the general technical characteristics of the power plant and quantify the uncertainties and risks on the output.
historical analysis of flow data at the operating site and at the nearest public measurement stations
review and analysis of maintenance reports, production reports, meter readings to model production history
collection and quantitative analysis of the history of availability rates
Information:
Call us at +33.4.93.71.33.11 or contact the Commercial Department @
Zelya Energy works on performance analyses, audits of dams and turbines in operation, as well as on rehabilitation projects (old power stations, milling, mills, simple use of off-plan rights...).
The firm relies on its internal team of multidisciplinary and highly qualified engineers and specialized experts, for different types of works.
In particular, we are able to address the following issues:
Our team conducts every year feasibility studies, technical and financial assessments of project sites and hydroelectric power plants (from a few hundred kW to several MWs).
Our understanding of the functioning of markets and our thorough knowledge of the profitability issues of renewable assets allows us to provide comprehensive solutions, meeting operational needs on the field as well as managerial and financial needs at the center level.
Technical due diligence of hydroelectric power plant
Study of connection conditions to electrical networks
Audit of the actual condition of the equipment
Study of performance and risk of failure
Technical due diligence is a complement to regulatory due diligence. It validates the general technical characteristics and quantifies the uncertainties and risks on the values retained for the output.
More specifically, it aims to:
identify any inconsistencies between sizing and production, operation and maintenance conditions
validate the general technical characteristics of the hydroelectric power plant: reserved flow, actual flow, losses, efficiency, availability, output
quantify the uncertainties and risks that could have a negative impact on these technical characteristics;
suggest realistic assumptions on these technical characteristics for the financial evaluation model in case of acquisition;
recommend, list and prioritize the appropriate suspensive conditions in the context of a purchase offer submission
To evaluate the output to retain and quantify the uncertainties and risks of variation of its value, we proceed to the following tasks:
collection of relevant documents: equipment supply contracts, operation and maintenance, insurance, connection and access to networks, resource and output study, reserved flows, local and nearby hydraulic history, etc
Technological analysis and evaluation of the global sizing of the equipment
analysis of the technical clauses of the contracts: efficiency, availability and gross, guaranteed and insured output
analysis of maintenance and production reports
quantitative and qualitative analysis of the history of the availability rate
The study of the technical conditions for connecting a hydroelectric power plant to the transport or distribution network is a complement to the technical due diligence.
It is necessary when it is necessary to examine more specifically and in detail whether the connection is optimized (acceptable level of line losses up to the delivery point, reasonable rate of unavailability and cut-offs at the network level,...), and, more generally, if the sizing and operating conditions of the internal electrical installation are compatible with that of the connection to the electrical networks.
More specifically, it aims to:
identify any inconsistencies between the sizing and operating conditions of the internal installation and the connection infrastructure
validate the technical characteristics of the connection
quantify the uncertainties and risks that could have a negative impact on the output
suggest realistic assumptions on these technical characteristics for the financial evaluation model
recommend, list and prioritize the appropriate suspensive conditions or possible improvements
The audit of the actual condition of the equipment in operation is a complement to the technical due diligence. It is based on site visits, on the history of investments and maintenance interventions, and on the possible concession specifications
It allows to verify that the mechanical, electrical, hydraulic equipment is in good working and maintenance condition and to establish if necessary a list of measures to be taken and replacement equipment to be stocked
More specifically, it aims to:
inventory installed equipment
qualify the actual condition of mechanical, electrical and hydraulic equipment and their maintenance
identify measures to be taken before or after the transaction
recommend, list and prioritize the appropriate suspensive conditions: replacement measures to be taken, stocks to be constituted...
The opportunity and the scope of the on-site technical audit of the power plant in operation can be decided according to the results and recommendations of the technical due diligence, the performance study and the study of the guarantees and maintenance.
In particular, depending on these results, the visual inspection and some specific tests can be targeted only on a sample of machines (infrared, endoscopy of the gearbox, vibratory analysis, isolation test,...)
The on-site audit by visual inspection can generally cover the forced pipe, the HTA and BT cabinets, the generator, the power electronics, the gearbox...
The study of the actual performance of a power plant in operation is a complement to the technical due diligence.
Its objective is to identify the origins of the under-optimization of the output given the conditions of its operation and, in particular, to quantify the impact of maintenance operations on the availability of production and, thus, to verify if the conditions of maintenance and the guarantees subscribed are optimal.
More specifically,
Zelya Energy most often intervenes in the complete rehabilitation of structures (old power plants, flour mills, mills, simple use of established title rights...), on technical audits of dams and turbines in operation as well as on the development of new power plants.
The firm relies on its internal team of multidisciplinary and highly qualified engineers as well as specialized experts, for different types of structures.
Our team carries out feasibility studies every year, technical and financial evaluations of potential hydraulic developments and hydroelectric power plants (from a few hundred kW to several MWs).
Our team supports both the development of new power plants and renovation operations (renovation of old power plants, operational power plants, rehabilitation of old mills, flour mills, mills...).
Our services in support of this type of development include feasibility studies, supervision of engineering and design studies, environmental analysis.... Various types of services and/or partnerships exist for the development or rehabilitation of hydroelectric capacities.
Our team carries out feasibility studies, technical and financial evaluations of potential sites and hydroelectric power plants every year (from a few hundred kW to several MWs).
Our solutions cater to both operational needs in the field and managerial and financial necessities at directorate level.
Hydroelectric power station technical due diligence
Study of grid connection conditions
Audit of the real state of equipments
Information:
Call us at +33.4.93.71.33.11 or contact the Commercial Department @
Thanks to our expertise in financial models applied to hydropower assets, we have developed specific methods and tools for evaluating and modelling these assets.
Our services and support have been designed to provide expert and tailor-made support to all stakeholders involved in transactions of projects, power plants, or hydropower portfolios, ranging from several hundred kW to multiple MWs. We have also advised producers on the evaluation of the opportunity to take over or renovate large dams.
Review and verification of your business plan and financial projections (base scenario)
Analysis of the economic profitability and financial viability of hydropower projects and plants
Preparation of a full financial model and estimation of the MW sales price in project and operation
Support in defining financial terms for acquisition or sale
This step consists first of collecting and assessing the consistency and uncertainty of the technical and economic assumptions of the business plan, simulating them or generating them from ratios observed in the French hydroelectric market for similar projects, based on regulatory analysis and the expertise of Zelya Energy.
This step consists of proposing a value range for the hydroelectric park depending on its age and the technology used.
Finally, we will carry out a critical analysis of the valuation results obtained, comparing them to transaction amounts observed on similar hydropower projects and parks. At what price are similar hydroelectric plants being sold at the time of analysis, with similar configurations, technologies, or water resources?
Zelya Energy provides a note summarizing the assumptions and results of the financial model, as well as the different value ranges obtained
The implementation of the financial model can rely on the results:
of the technical due diligence, the performance study and failure risks, and the study of power increase possibilities dealing with production
of regulatory due diligence
of electricity sales tariff simulation
of O&M contract and insurance policies analysis
Information:
Call us at +33.4.93.71.33.11 or contact the Commercial Department @