Financing Strategy for Renewable Energy
Assume the renewable energy project you studied in Week 4 is projected to be profitable and to have a significant NPV and attractive IRR. In no more than 1,050 words, prepare a white paper report with your recommendations that responds to the following questions:
What is your financing strategy for the project? Consider construction-period financing and long-term financing alternatives.
Do you recommend asset-backed financing or traditional portfolio financing?
Which specific financial structure will you propose to the company treasurer?
How will your proposed financing plan fit within the existing structure of your diversified energy company?
What risk reduction techniques do you plan to employ?
As a part of the financing strategy for the project, what types of assets might be considered appropriate to lease? Would hedging be employed in the strategy? Why or why not? What tax and other entity structure factors might make leasing appropriate?