88 Energy Project Financing: Resources and Strategies for Success
Relative Risk Level
Associated with Financing Options
———————————————————
Risk
Option
Major
Mitigating
Factors
#1 #2 #3 #4 #5 #6
Variables
Strategies
——————————————————————————————————————————————————Savings verifi-
3
3
3
3
3
1
Needs vary by
Costs paid for accuracy
cation instru-
measure/guarantee
3rd party validation
ments approach
Accuracy
——————————————————————————————————————————————————Establishing base year; 3
3
3
3
3
4
Availability of historical data
Organizations energy management
proce-baseline adjustments
Clarity of formulas in the contract dures; Combined legal& tech. expertise
——————————————————————————————————————————————————Provisions &
3
3
3
3
3
5
Procedures accuracy
Instruments & approach used
cost for M&V
Cost
——————————————————————————————————————————————————Cost of delay/
5
4
3
2
2
1
Audit delays
Recognize costs incurred by delay;
schedule adherence
Financing/ESA
Consider penalty clauses when comple-
Design delays
tion delayed; City expedite reviews, etc.
Construction delays
when possible; Check past practice of
firms during selection process
——————————————————————————————————————————————————Hidden project
1
1
2
4
3
5
Margins, mark-ups
Option 4-6; Reserve right to
costs
Profit
bid equipment; Open book pricing
——————————————————————————————————————————————————Facility control
1
1
1
1
1
5
Contract provisions
Specify acceptable parameters in
problems
contract
——————————————————————————————————————————————————Quality of
5
5
5
5
2
1
Specification for
Selection of service provider to
maintenance
maintenance trainer’s
provide training
training
abilities; cost
——————————————————————————————————————————————————Intrusion/
4
4
4
4
4
5
Contract language—stipu-
Close coordination with maintenance
interruption
late hours of installation
staff; careful attention to operation needs
——————————————————————————————————————————————————Legend: N/A not applicable; 1 low risk; 2 low-medium risk; 3 medium risk; 4 medium-high risk; 5 high risk
Table 4-1. Risk Assessment Matrix (
Continued
)