rosatom financial solution for npp financing models and risks 3/5. finance.pdf ·...
TRANSCRIPT
АКЦИОНЕРНОЕ ОБЩЕСТВО «РУСАТОМ ОВЕРСИЗ»
Rosatom Financial Solution for NPP
Financing models and risks
Discussion Materials
Accra Meeting
November 17, 2017
THE STATE ATOMIC ENERGY CORPORATION “ROSATOM”
Table of Contents
2
1 NPP financing «go or no go» decision 3 – 4
2 Financing models 5 – 12
3 Project Financing consideration 13 – 17
4 Comparison of Implementation and Financing Arrangements 18 – 20
1. NPP financing «go or no go»
decision
NPP financing «go or no go» decision1
4
Main challenges
• The magnitude of funding
requirements ~ 5-6 bln $ per Unit
• Front-loading of costs incurred:
>2/3 of total lifetime costs before
the COD*
• Long construction period – up to
10 years
• Long periods needed to recoup
the original costs ~ 13-17 years
after COD
Main benefits
Each investor benefit:
• 60-year stable positive cash flow
stream
• Low operational costs per 1 MW,
high margin (50-70%)
• Can be interesting for institutional
and private investors after COD
Particular investor benefit:
• Diversification of base generation
- no dependence on fossil fuel prices
Accept Reject
* total lifetime costs means discounted CAPEX and OPEX of the NPP
1. All figures are based on the international experince and Rosatom general market knowledge and assumptions
2. Financing models
Financing models consideration
6
Model 1 Sovereign financing
Model 2 Corporate financing
Model 3 Project financing
Model 1. Sovereign Financing
7
Wholesale
Project Company
Host Country
Retail
EPC Contractor Payments
Electricity sales Revenue stream
Revenue stream
EPC contract
Ownership
Optionally to include
NPP life-cycle
contracts:
- Fuel supply
- O&M services
- Spent fuel treatment
Model 2. Corporate model
8
Wholesale
NPP Owner – Large Utility
Debt providers
Retail
EPC Contractor
Electricity sales Revenue stream
Debt repayment
Debt
drawdown
Payments
EPC contract
Optionally to include
NPP life-cycle
contracts:
- Fuel supply
- O&M services
- Spent fuel treatment
Model 2. Corporate model with Project company
9
Wholesale
Debt providers
Retail
EPC Contractor
Electricity sales Revenue stream
Debt repayment
Debt
drawdown
Payments
EPC contract
Project Company
NPP Owner – Large Utility
Debt guarantees
Ownership
Optionally to include
NPP life-cycle
contracts:
- Fuel supply
- O&M services
- Spent fuel treatment
Model 3. Project Financing Fundamental approach from the NPP perspective
10
Wholesale
Debt providers
Retail
Electricity sales Revenue stream
Debt repayment
Debt
drawdown
Project Company
Obtaining licenses and permits
Project management
Fund raising
Debt repayment, dividend payout
Contract execution
Operation
Decommissioning and waste disposal
Contractor
EPC contract
Fuel supply contract
Spent fuel treatment
Operation & maintenance contract
Host Country Consortium New investors
>50.1%
equity ownership
< 49.9%
equity ownership
Model 3. BOO as a Particular Case of Project Financing Fundamental approach from the NPP perspective
11
Wholesale
Debt providers
Retail
Electricity sales Revenue stream
Debt repayment
Debt
drawdown
Project Company
Obtaining licenses and permits
Project management
Fund raising
Debt repayment, dividend payout
Contract execution
Operation
Decommissioning and waste disposal
Contractor
EPC contract
Fuel supply contract
Spent fuel treatment
Operation & maintenance contract
Host Country Consortium
>50.1%
equity ownership
< 49.9%
equity ownership
Financing Model Implementation Experience
12
Corporate
Model
Project
Financing
Sovereign
Financing • Already implemented: Russia, China, India, France
• New-build projects: Belarus, Egypt, Bangladesh
Never actually happened for NPP yet
• State owned companies: Russia, France, UAE
• Private companies: Germany, South Korea, US
Why?!
3. Project Financing consideration
Standard terms of project financing
Major financing sources
14
Equity in amount not less than IDC + 30% of OCC
Commercial loans
Unique terms of project financing:
No recourse to sponsors for the Project Company obligations
Instrument for lenders’ risk mitigation – PC pledged assets
Single source of repayment - PC operational cash flow
NPP financing «go or no go» decision1 Main challenges
15
Main challenges
• The magnitude of funding
requirements ~ 5-6 bln $ per Unit
• Front-loading of costs incurred:
>2/3 of total lifetime costs before
the COD*
• Long construction period – up to
10 years
• Long periods needed to recoup
the original costs ~ 13-17 years
after COD
Accept Reject
* total lifetime costs means discounted CAPEX and OPEX of the NPP
1. All figures are based on the international experince and Rosatom general market knowledge and assumptions
16
LICENSE RISKS
Nuclear Power Project Risks
SITE RISKS
POLITICAL RISKS
NUCLEAR LIABILITY
RISKS
OPERATIONAL RISKS
PROJECT MANAGEMENT
RISKS
PROJECT COMPLETION
RISKS
Protection Tools
SOVEREIGN GUARANTEES
SPONSOR GUARANTEES
Key risks for private
investors Key risks for financial
institutions
NPP financing «go or no go» decision Main Risks
Model 3. BOO as a Particular Case of Project Financing Enhanced approach from the NPP perspective
17
Wholesale
Debt providers
Retail
Electricity sales Revenue stream
Debt repayment
Debt
drawdown
Project Company
Obtaining licenses and permits
Project management
Fund raising
Debt repayment, dividend payout
Contract execution
Operation
Decommissioning and waste disposal
Contractor
EPC contract
Fuel supply contract
Spent fuel treatment
Operation & maintenance contract
Host Country Consortium
>50.1% equity
ownership
< 49.9% equity
ownership
Host Country Sovereign guarantee Sovereign guarantee
Sovereign guarantee
Site
Transmission
Host Country
4. Comparison of Implementation and
Financing Arrangements
19
Comparison of Implementation and Financing Arrangements General terms
BOO Implementation +
Project Financing (Enhanced)
EPC Implementation +
Sovereign Financing
Very high, even with ECA-support Low
HOST COUNTRY
GUARANTEES
• Financial guarantees for: investors,
lenders, ECAs.
• Guarantees for the SPV: ETL, sales, site,
nuclear liability
In the amount exceeding
the intergovernmental loan
ELECTICITY TARIFFS AND
SALES VOLUME Secured electricity tariffs and guaranteed
sales volume sufficient to secure
investment returns
No extra cost for the consumer
REAL LIFE EXAMPLES Turkey, Finland Egypt, Hungary,
Bangladesh, Belarus
BORROWING COSTS
FUNDRAISING Availability of funds depends on
government constraints
Probably lack of funding
20
Comparison of Implementation and Financing Arrangements Sharing of Project Risks
BOO Implementation +
Project Financing (Enhanced)
EPC Implementation +
Sovereign Financing
Operator, Shareholders Operator, Government
Operator + Government Operator + Government
OPERATIONAL RISKS
NUCLEAR LIABILITY RISKS
Shareholders and/or Guarantor Government
Shareholders and/or Guarantor Government
Government Shareholders and/or Guarantor PROJECT COMPLETION
RISKS (INCL. POLITICAL, LICENSE ETC.)
PROJECT MANAGEMENT
RISKS
FINANCIAL RISKS