AMBROGIO

This tool is the result of a fruitful collaboration to help understand the strong correlation between regulations and the cost of solar electricity. A full version of this tool for specific country would kindly be developed upon request. This page is for demonstration tool purposes only.

1400 kWh/kWp

Solar yield

$825,000/MW

Capex

LCOE en $/MWh

Current $71.5
Best Case $30

Cost of Equity

Current 12.1%
Best Case 6.6%

Cost of Debt

Current 6.8%
Best Case 2.8%

Rule of law and Effective dispute resolution

Rule of Law means that all stakeholders shall be subject to and accountable to law that is fairly applied and enforced. An effective dispute resolution means an efficient process of resolving disputes from independent jurisdictions, whether it be judicial or extrajudicial (arbitration, mediation…).

  • +2 Stable legal and regulatory framework, fast judicial system, international arbitration available, fast enforcement of arbitration award
  • +1 Stable legal and regulatory framework and fast judicial system, international arbitration available
  •  0 Stable legal and regulatory framework and slow judicial system, international arbitration available
  • -1 Unstable legal and regulatory framework, slow judicial system, international arbitration available
  • -2 No international arbitration and very poor judicial system (NO GO)

Securities Enforcement

Means the ability for the beneficiary to exercise successfully its onshore securities (i.e. guarantees, mortgages, pledges).

  • +2 Enforcement possible, automatic with no need for judicial enforcement
  • +1 Enforcement possible and quick judicial enforcement
  •  0 Enforcement possible but judicial enforcement takes time
  • -1 No enforcement of security possible

Forex Regulations including convertibility

Means free convertibility into foreign currency, right to freely and easily open and maintain onshore bank accounts in foreign currency and offshore bank accounts, right to freely repatriate profits offshore together with no-obligation to maintain profits onshore.

  • +2 Project and investors located in same currency zone so there is no convertibility issue
  • +1 Free convertibility covered by insurance mechanism
  •  0 Free convertibility with a specific priority right with respect to currency reserves
  • -1 Convertibility for limited purposes
  • -2 No convertibility (NO GO)

PPAs and off-taker related issues including non-conflict of interest

The Power Purchase Agreement means the standard contract which shall be available, to be entered into between a producer of electricity (the seller) and a party which is looking to purchase electricity, also called the off-taker (the buyer). This standard agreement shall allocate a fair liability repartition between the State-owned off-taker and the grid operator.

  • +2 Standard PPA and independent regulator
  • +1 Standard PPA and no independent regulator
  •  0 No standard PPA, existence of a market practice PPA which does not need to be negotiated for long time, no independent regulator
  • -1 No standard PPA, existence of a market practice PPA which still needs to be negotiated for each project (time consuming) and no independent regulator
  • -2 No standard PPA and no market practice PPA, no independent regulator

Power Market Regulations, access to consumers and other alternatives to public PPAs

Means a structured, stable and secured regulatory environment applicable to the sale and purchase of power on a liberal market.

  • +2 In case of early termination, possibility to sale the electricity to another off-taker at the market conditions
  • +1 In case of early termination, possibility to freely sale the assets to the market
  •  0 In case of early termination, guaranty to cover the losses of the project
  • -1 In case of early termination, contractual compensation (partial and long enforcement)
  • -2 In case of early termination, loss of the project and no compensation for the loss of the assets (NO GO)

In collaboration with: