HAVELET FINANCE LIMITED

  Current trends, challenges and opportunities for Renewable Energy project finance cannot be over emphasized. Looking back at 2020 and the   development of renewable resources , notwithstanding the COVID-19 pandemic, renewable energy continues to be a rapidly growing segment of the economy. In first three quarters of 2020, 70% of all new U.S. power capacity came from renewable energy, almost entirely solar and wind. Expected challenges in project finance include: Finance Challenges Inflation measured by the U.S. Department of Labor’s consumer price index (CPI) ended 2021 at 7.0 percent over the previous 12 months.  The CPI will fall, but there is disagreement about how much and when. The recent surge in prices has been due to production bottlenecks and supply-chain constraints. These factors are translating to higher clean energy project costs and making lenders require equipment contracts or shorter project timelines to ensure loans are repaid. Adding large numbers of n...

  Repercussions of  COVID-19 and project finance transactions. The unexpected plunge in oil prices, school and business shutdowns and increased concern around the  impact of COVID-19  (coronavirus), the need for  project financiers  and borrowers to consider the implications under their finance documents has become even more pressing. Within the spheres of a project finance transaction, the interruption of construction or operations can have significant implications. The project company is typically a thinly capitalized special purpose vehicle and lenders have limited or no recourse to sponsors in circumstances where the project is underperforming. In this note we consider some of the issues under the finance documents for typical project finance transactions. Is the borrower required to provide any information to the lenders? Most facility agreements contain information undertakings with which borrowers need to ensure they comply. The scope of the undertak...