i got a couple interviews coming up with oil companies for corporate finance functions and funds that invest in energy projects. i was wondering if anyone could recommend any books, resources to learn more about the finance side of energy. thanks.
fredfunk04 Wrote: ------------------------------------------------------- > i got a couple interviews coming up with oil > companies for corporate finance functions and > funds that invest in energy projects. i was > wondering if anyone could recommend any books, > resources to learn more about the finance side of > energy. > > thanks. Hey man, I am working in that field, i.e. financing of renewable energies (I do solar & wind) projects. I wish I could direct you to some books, but I haven’t read any on the subject, lol. The truth is that in my experience energy project finance isn’t rocket science at all. The typical project is an developer 1) securing bank financing 2) selling the equity of the SPV to a fund and 3) building the project. It’s straigth-forward but pretty complex, as it involves a sh!t load of permits and authorisations (especially if we’re talking about subsidised feed-in tarifs), contracts and sub-contracts, and much legal stuff since we’re talking about non-recourse financing so that banks expect everything to be pledged to them, from the shares in the SPV to rights from insurance and maintenance contracts. The reason for that is that should the project go to crap, banks typically won’t try to dismantle it but rather sell the whole turn-key project. So for your interview I would read/practice a bit about: - Financial Modelling for projects (our spreadsheets are relatively simple and standard: 1 sheet for the capital structure of the project, 1 for scenarios (Investors Case, Base Case, Worst Case, P95 Case, P75 Case, etc.), 1 for revenues and costs, 1 for debt service, and ultimately 1 where everything is put together so you get the Debt Service Cover Ratio which interest banks and Dividends and IRR which interest the equity investor. - SPV structures & legal stuff about pledges, subordination and financing such as shareholder loans, mezzanine, etc. - The market you will be operating in (where and what type of energy) and the whole authorisations & permit landscape, especially if you’re looking at a subsidised market. I hope that long post helped a little. Good luck to you.
yall here in Htown by any chance?
viceroy - thanks for the feedback. sounds similar to an lbo model, which i’m pretty familiar with. what are typical target returns for the debt and equity parties? i think i’ll need to spend most of my time learning the regulatory drivers then. skipe99 - nah but one of the positions has an option to be in dallas.
If there’s going to be a significant renewable component, you should be familiar with the so-called “tax equity” market. Many renewable developers are small and/or foreign, and thus lack the tax appetite to use the tax credits and benefits which flow off renewable projects. The tax equity market is used to monetize these credits, and the transactions can get fairly complicated. I can elaborate if it will be relevant.