Zelya Energy acts on behalf of operators, investors and lenders in various areas of expertise related to hydroelectricity and finance (Audit, Valuation, WACC...).
Strong experience in due diligence of hydropower plants
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.
Understanding financial expectations
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.
Precise support to facilitate acquisition
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.
Type of interventions
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
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.
Content / Deliverable
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
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.
This service includes :
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
Services associated with technical due diligence are:
- Evaluation of uncertainties and risks likely to adversely affect the future operation of the hydroelectric power plant, and corrective measures to be taken
- Study of the technical conditions of connection to the electric networks: aims to validate the connection conditions and to verify their optimization (losses, unavailability, cut-offs,...) ;
- The on-site audit of a hydroelectric power plant: aims to analyze the technical performance of the mechanical, hydraulic and electronic equipment of the power plant and to issue recommendations on the general state of the installations and the need for replacement ;
- The performance study and risk of failure of an operating power plant aims to identify the origins of the under-optimization of the output given the conditions of its operation.