BIOGAS POWER PLANT PROJECT Business Process, Due Diligence and Risk Management

BIOGAS POWER PLANT PROJECT Business Process, Due Diligence and Risk Management USAID ICED II

Belitung, 26 October 2016

10/26/2016

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OUTLINE

Small Scale Commercial Biogas Power Plant Business Commercial Biogas Power Project Development

Biogas Power Project Due Diligence Risks Analysis and Management

Small Scale Commercial Biogas Power Plant Business Pembelian/ Pengadaan Energi Primer

Konversi Energi Primer Menjadi Energi Listrik

Produk

Penjualan & Penyaluran Produk

Revenue/ Penghasilan

Energi Primer/ Sumber Energi Terbarukan

Teknologi Pembangkit Listrik

Tenaga Listrik

Titik Koneksi, Jaringan Listrik PLN

Pembayaran PLN

BIOGAS DARI POME

PLTBG

20 kV, 50 Hz, 3 Phase

JTR 400 V, JTM 20 kV, Transmisi diatas 20 kV

IDR/USD as FIT Regulation

PLTBG= Pembangkit Listrik Tenaga Biogas

Small Scale Commercial Biogas Power Plant Business Model Resources

Resources Owner

Developers Resources Owner

FEEDSTOCK (POME)

Private / BUMN / Public

Own Project (In-House or Turn-Key)

BOO Scheme (Built-Own-Operate) Third Party Project Developer

BOOT/BOT approach requires Legally Binding Agreements on: • Land Use • Delivery of waste stream • Energy supply and purchase

Mechanism

BOOT Scheme (Built-Own-OperateTransfer

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

OUTLINE



Commercial Biogas Power Project Development: Project Stages 3 ~ 6 bulan Pra-Studi Kelayakan/Pr e-FS/FS Studi Lingkungan

Studi Interkoneksi Pengurusan Ijin, Akusisi Lahan

6 ~12 bulan 12 ~ 18 bulan PJBL/PPA 12 bulan

Detail Engineering Design

Financing

Procurement

Equitas Konsep/ Basic Desain Perijinan & Lahan

EPC Kontrak Draft O&M Kontrak Draft

Typically 15 ~ 20 years O&M COD Production

Construction

Fuel Supply Agreement Draft

Design & Planning Stage

 Kualitas Basic Design & Planning yg baik menentukan tingkat kelayakan finansial, ekonomi, dan lingkungan dari proposal bisnis

Construction Stage

Operational Stage

 Project Management dan Kontraktor yang berkualitas menentukan suskes tidaknya tahap konstruksi

RISK MANAGEMENT and DUE DILIGENCE MUST BE DONE IN ALL STAGES OF THE PROJECTS!!

Commercial Biogas Power Project Development: Project Timeline 3 - 6 months

6 - 12 months

6 - 12 months

12 – 18 months

Typically 15 ~ 20 years

1.

Pre-FS and & Interconnection Study

9. Obtain balance of permits & License

2.

Raise Seed Equity

10. Raise balance of equity

3.

Feasibility Study

11. Obtain debt financing

4.

Obtain Local Permits

12. Financial Closure

5.

Feedstock Supply Agreement (FSA)

13. Implement construction work

6.

Power Purchase Agreement (PPA) with PLN

14. Test Run and COD

7.

EPC Contract & O&M Contract

15. Operation Stage

8.

Land Acquisition

16. Project Transfer or Decommissioning

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

METODE DUE DILIGENCE DALAM TAHAP DESIGN & PLANNING (GREEN FIELD TYPE PROJECT) Independent Engineering Consultant konsultan ahli project biogas yang berpengalaman nasional/internasional

cek semua aspek lingkungan & sosial apakah ada rencana mitigasi & alokasi risk yg jelas?

cek semua aspek teknis desain, analysis, metode dan data apakah valid? DETAIL DESK REVIEW & ASSESMENT

Independent Environment & SocioCulture Consultant

konsultan ahli lingkungan,sosio-kultur harus nasional/lokal

FIELD REVIEW/CHECK

cek semua aspek teknis yang spesifik apakah ada masalah?

cek semua aspek yg berkaitan dengan legalitas contract,perizinan, hukum apakah ada masalah? Independent Law Consultant konsultan ahli hukum harus nasional

Due Diligence Process

Independensi, kerahasiaan, bebas dari konflik interest, quality & control risk management control adalah kunci suksesnya due dligence yg berkualitas

Independent Specilist spesialis ahli project biogas yang 9 berpengalaman nasional/internasional

METODE DUE DILIGENCE DALAM TAHAP DESIGN & PLANNING (GREEN FIELD TYPE PROJECT) Independent Engineering Consultant konsultan ahli project biogas yang berpengalaman nasional/internasional

DETAIL DESK REVIEW & ASSESMENT

cek semua aspek yg berkaitan dengan legalitas, contract, perizinan, hukum apakah ada masalah? Independent Law Consultant konsultan ahli hukum harus nasional

cek semua aspek lingkungan & sosial apakah ada rencana mitigasi & alokasi risk yg jelas?

cek semua aspek teknis desain, progress project, dan output apakah sesuai dengan desain?

DETAIL FIELD REVIEW & ASSESSMENT

Due Diligence Process

Independensi, kerahasiaan, bebas dari konflik interest, quality & control risk management control adalah kunci suksesnya due dligence yg berkualitas



cek semua aspek teknis yang spesifik apakah ada masalah? Independent Specilist spesialis ahli project biogas yang 10 berpengalaman nasional/internasional

PROPER DUE DILIGENCE GREEN FIELD TYPE PROJECTS

PROPER DUE DILIGENCE

DETAIL DESK REVIEW & ASSESSMENT of PROJECT DEVELOPER and PROJECT PROPOSAL + FIELD REVIEW/CHECK

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?

BROWN FIELD TYPE PROJECTS

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?

TUJUAN DAN MANFAAT DARI DUE DILIGENCE (DD)/UJI TUNTAS 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

ASSESSMENT OF VARIOUS KEY ASPECTS IN THE DUE DILIGENCE  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

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ASPECT OF STRUCTURE PROJECT (1) LIMITED RESOURCE STRUCTURE, PROJECT FINANCING PEMEGANG SAHAM Partner 1

FUEL SUPPLIER Fuel Supply Agreement

Partner 2

Shareholder’s Agreement

“Deliver or pay Agreement”

LENDERS

Loan Agreement

PLN

Other equity investors

POWER PURCHASER

Power Purchase Agreement

“Take or/& pay Agreement”

Project Vehicle

Permits & Licenses

HOST GOVERNMENT Permits (IUPTL, Principal Permit, IMB, UKL-UPL, Etc)

Loan Proceeds Construction Contract

Insurance Agreement

O & M Contract

Sub-contractor

MAIN CONTRACTOR

INSURANCE COMPANY

EPC Limited Guarantees

O&M OPERATOR

ASPECT OF STRUCTURE PROJECT (2) FULL RESOURCE STRUCTURE, BALANCE SHEET FINANCING

PLN

POWER PURCHASER

LENDERS

Loan Agreement

Loan Repayment

Power Purchase Agreement

“Take or/& pay Agreement”

Project Sponsor

Loan Proceeds

Sales Proceeds

Construction Contract

Sub-contractor

MAIN CONTRACTOR

Loan Proceeds

EPC

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GENERAL CHARATERISITICS A small commercial project: The capacity of small scale Biogas Project capacity is around 0.5 MW to 3 MW. A dedicated Power Plant: A small scale IPP Biogas Power Plant that connects and serves to PLN as a Sole Of Taker within “TAKE OR PAY PPA” type or “TAKE AND PAY PPA” type.

Project Sponsor generally has Equity around 20-35% of total investment cost and Lender provides Loan for the rest. Project Company may use single EPC (turn key) contractor or some different contractors for project construction.

Project Company may use different O & M contractor(s) to Operate and Maintenance the Biogas Power Plant. All agreements or contracts are significant for project risk allocations BOO/BOT/BOOT agreement is complicated. All related parties are looking for the best deal structure for the agreement.


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Review/Assessment of Project Company & Sponsor  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.

Flow Diagram to review/assess the Strength of Project Company & Sponsor in the Project Development

Example Check list for DD of Project Company & Sponsor (1) No

Due Diligence Item

Informasi Yang Diperlukan

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. b. c. d. e. f.

Approval Letter of Foreign Capital Investment ("SP-PMA") MOLHR approval of the IPP’s deed of establishment. Certificate of Domicile issued by the Head of Sub District. Registration of the Deed of Establishment with the DOT. Corporate Financial Year Reports Report on Domestic and Foreign Capital Investment Activities

3

Shareholders review

a. b. c. d.

Shareholders Agreement Shareholders structure changes Shareholders ‘s structure changes Voting procedures

Check Yes

No

Example Check list for DD of Project Company & Sponsor (2) No

Due Diligence Item


4

Company Management Review

a. b. c.

CV of each manager CV of each board member Relevance of background experience

5

Proforma review

a. b. c. d. e.

Project assumptions are reasonable Financial model is audited. Sensitivity/scenario analysis conducted to weigh various risks. Cost & production structure is appropriate from technical perspective. Technical specialists are involved in the analysis

6

Project sponsor experiences

a. b. c.

Experiences in RE power projects in Indonesia Experiences in the similar/same power projects Experiences in RE power projects in overseas

7

Project sponsor corporate strategy

a. b. c.

Financial management policy (financial ratios, dividend policy) Plan to access the equity market/investors in the future Plan for developing future projects

Check


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Review/Assessment of Project Contractual Structure  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.)     

Example Check list for DD of Contractual Structure of The Project (1) No

Due Diligence Item


5

Land-lease agreement review

a. b. c. d.

Agreement in place ? Located in protected forest land? Any guarantee on available capacity Fair reward and penalty clause on meeting contracted capacity

6

Interconnection and distribution line arrangement review

a. b. c. d. e. f.

Interconnection requirements Agreement and planned facilities Testing and Commissioning Date & Procedures Interconnection point review Transaction point review Power meter review

7

Project insurance program

a. b. c.

Construction insurance all work Business interruption insurance Third party liabilities

Check Yes

No

Example Check list for DD of Contractual Structure of The Project (2) No

Due Diligence Item


1

PPA review

a. b. c. d.

PPA in place ? Type of PPA contract: (take-or-pay contract)? Any guarantee on available capacity Fair reward and penalty clause on meeting contracted capacity

2

EPC contract review

a. b. c. d. e. f.

EPC contract or not EPC salient features: - Warranty - Lump sum - Cost plus fee Match with PPA

3

O & M contract review

a. b. c.

O & M contract in place? Match with PPA LTSA with equipment suppliers

4

Fuel Supply Agreement (in case of biomass/biogas projects)

a. b. c. d.

FSA in place? Supply guarantee FOB/CIF price structure Review of transportation methodology

Check Yes

No

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Example Check list for DD of The Technical Aspect (1) No

Due Diligence Item

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

Note

Example Check list for DD of The Technical Aspect (1)

No

Due Diligence Item


1

Identified risks and mitigation plan development

a.

Has the project company done it?

2

Feasibility Study Review

a. b. c. d. e.

Is FS in place? Is FS updated with the newest information? Review of project layout Review of general design Review of DED by Technical specialists/consultants

3

Project Organization review (during construction and operational phases)

a. b.

Key management post s are filled Key management competency are relevant

4

Technology issues review

a. b. c. d. e. f.

POME & BIOGAS study review Feedstock availability and security supply study Choice of technology review Choice of equipment suppliers review Choice of contractors review Choice of DED consultant review

Check Yes

No

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Review/Assessment of Environment & Social Aspects  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

Example Check list for DD of The Environment and Social Aspect (1) No 1

Due Diligence Item Review AMDAL/UKL-UPL

Informasi Yang Diperlukan a. b. c. d.

AMDAL/UKL-UPL in place? UKL/UPL addresses and mitigates the environmental and social risks Critical socio-environmental issues addressed for project development and operation 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)? Review key public concerns and how they are addressed in project planning/AMDAL documents Have there been any protests or negative publicity regarding the project?

b. c. 4

Review support from the local communities

a.

Check Yes

No

Does the local communities understand the benefit of the development of RE project for them

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Review/Assessment of Financial Aspects (1) 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

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.

(apakah diberikan skenario optimis dan pesimis disamping skenario dasar, dan apakah diberikan juga analisa sensitivitas & bagaimana rencana mitigasinya?) 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

4

Review detil asumsi yang digunakan: Asumsi Makroekonomi dan referensi asumsi yang diambil.

5

Asumsi Finansial: suku bunga, financial fee, IDC, Required ROR

Bank, as the senior debt provider, needs to ensure that it has the strongest lender’s security in the financing terms

Asumsi tersebut seharusnya realistik, tidak terlalu jauh dari kondisi saat ini.Refernsi asumsi: Gunakan asumsi dari sumber terpercaya APBN, BI dan BPS Suku bungan dan financial fee harus dikonfirmasi dengan sumber pendanaan.Praktek umum proyek: memasukkan IDC dalam biaya investasi. - ROR harus reaslistik 33

Review/Assessment of Financial Aspects (2) No 6

Due Diligence Item

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

7

Review capital cost; major equipment, civil work, mechanical and installation work, transmission lines

Note 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

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 (3) No 8

Due Diligence Item

Review the project profitability and debt service capacity (ratios, sensitivity and scenario analysis, debt service coverage ratio)

9

Review applicable PPA tariff (see if there’s any price escalation over time, pass through of feedstock prices, etc).

Note Review that the project has adequate cash flow to pay for the operational cost, debt (interest and principal), taxes, and dividend 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.

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TYPICALL SMALL SCALE BIOGAS POWER PLANT PROJECT: Project Cost Component CAPEX: 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 36

TYPICALL SMALL SCALE BIOGAS POWER PLANT PROJECT: Project Cost Reference (Value in 2008)

Sources: World Bank, 2008

TYPICALL SMALL SCALE BIOGAS POWER PLANT PROJECT: Project Cost Reference of Biogas Power Plant Project Cost Composition

Digester System

Unit 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

Capital Expenditures: Project Development Cost Site Preparation & Civil Work Digester System, Piping & Flaring Gas Cleaning & Pumps System Gas-Engines & Generator Controller & Electrikal System Balance of Plants Grid Interconection System Other Cost (IDC & Insurance)

2% 5% 34% 11% 17% 10% 11% 4% 5% 100%

Operational Expenditures: Operating Labour General Administration & Others Insurance Digester Service & Maintenance Gas Engine Service & Maintenance

25% 14% 5% 17% 39% 100%

Example Check list for DD of The Financial Aspect (1) No

Due Diligence Item

1

Review the detailed breakdown of total project costs

Information a. b.

c. 2

Review the probability of cost overruns

a. b. c. d.

Detailed cost has been accurately estimated The Contractor(s) and Supplier(s)work scopes have full coverage without gaps or inadequate contingencies Completion guarantees of all parties

Check Yes

No

The contingent budget allocation in the total project cost Project sponsor(s) to commit contingent equity contribution, ready to be disbursed upon request by the bank Check optimist and pessimist scenario besides basic scenario 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.

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Example Check list for DD of The Financial Aspect (2)

No 5

Due Diligence Item Financial assumptions

Informasi Yang Diperlukan a. b. c.

Interest rate & financing fees should conform to the proposed source of fund. Include IDC in investment cost Expected return of equity should be realistic compared to current economic condition & market return

6

Review financial model

a. b.

Is financial model in place? 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

Check Yes

No

40

Example Check list for DD of The Financial Aspect (3)

No 9

Due Diligence Item Review applicable PPA tariff

Informasi Yang Diperlukan a. b. c. d.

There’s any price escalation over time, pass through of feedstock prices, etc 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

Check Yes

No

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OUTLINE



ANALIS MANAJEMEN RESIKO PADA TAHAP DESIGN & PLANNING Independent Engineering Consultant konsultan ahli project biogas yang berpengalaman nasional/internasional

Resiko-resiko baru tambahan yg terindentifikasi

Rencana-rencana baru Mitigasi Resiko

DETAIL DESK REVIEW & ASSESMENT



FIELD REVIEW/CHECK

Independent Law Consultant konsultan ahli hukum harus nasional

Due Diligence Process Alokasi Resiko kedalam perbaikan Studi, Desain Kontrak, dll.

Independent Specilist spesialis ahli project biogas yang 43 berpengalaman nasional/internasional

ANALIS MANAJEMEN RESIKO UNTUK PENGEMBANGAN PROYEK BIOGAS Pengembangan proyek IPP skala kecil adalah pekerjaan yang melibatkan IDENTIFIKASI, MITIGASI dan ALOKASI RESIKO proyek selama pengembangan dan pengoperasiannya. TANPA DESIGN, CONTRUCTION, OPERATION & MAINTENANCE & MANAGEMENT SAFETY YG TEPAT PROYEK BIOGAS DAPAT MUSNAH TERBAKAR !!

Peran BANK dalam MANAJEMEN RESIKO BANK harus memahami dan memanajemen RESIKO - Identifikasi Resiko - Mitigasi Resiko:

Data yang akurat Desain yang tepat Lingkungan

Sosial - Alokasi Resiko: Contracts

Insurance Management

CHALLENGES OF THE DEVELOPMENT OF BIOGAS POWER PROJECT IN INDONESIA  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

THE OVERALL PROPER PROJECT PROPOSAL SUSTAINABLE SUPPLY OF FEEDSTOCK (POME, OTHER ORGANICS WASTE)

+ SUITABLE ANAEROBIC DIGESTION TECHNOOGY

+ SUITABLE GAS HANDLING & SCRUBBING TECHNOLOGY

+ HIGH RELIABILITY & PERFORMANCE RECIPROCATING GAS ENGINE

+ HIGH RELIABILITY GRID INTERCONNECTION

= LONG LASTING, LOW COST INCOME STREAM + OTHER BENEFIT

Note: by making good choices will a project be viable. Optimal decisions are necessary for a good return.

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

RESIKO DALAM PENGEMBANGAN PROYEK BIOGAS (1) Identifikasi Key area:

- POME & Biogas analysis - Geoteknik - Project Layout - Equipment - Project Budget - Logistik

- Distribusi listrik dan interkoneksi jaringan

Mitigasi

Alokasi

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

Resiko proyek di alokasikan melalui KONTRAK-KONTRAK: - BOO/BOT/BOOT agreement - EPC contract - Owner Financial Ability - Insurance - PPA - Land Contracts - Engineer - Local Authorities

RESIKO DALAM PENGEMBANGAN PROYEK BIOGAS (2) MANAJEMEN RESIKO penting dalam Kontrol Biaya dan Pendapatan Proyek BANK SEHARUSNYA TIDAK MENERIMA RESIKO YANG BELUM DIALOKASIKAN

Identifikasi - Detail POME & BIOGAS Analysis

- Analisa Geoteknik yang cukup akurat - Concept Design - Batasan Lingkungan dan Sosial - Local Political Risk - Kebutuhan Equity

Mitigasi

Alokasi

 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

 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

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

Resiko Biaya dalam pelaksanaan Konstruksi dan Pengoperasian Proyek 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-resiko kunci terhadap Pendapatan Proyek (Revenue) 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

DR. Hanny J. Berchmans Clean Energy Project Development Consultant 6287775006229 [email protected] +

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 Main: +62 21 5296 2325 | Fax: +62 21 5296 2326 www.iced.or.id

BIOGAS POWER PLANT PROJECT Business Process, Due Diligence and Risk Management

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