Vendor Due Diligence for Neoen’s second farm-down transaction
3E was appointed by the independent power producer Neoen to perform a vendor due diligence on two solar power plants located in Nouvelle Aquitaine and Occitanie, France.
The Lugos and Miremont plants were commissioned in June 2018 and July 2019, respectively, and hold power purchase agreements running to 2038 and to 2039. They have a total capacity of 21.7 MWp in operation. By selling those two plants, the client aims to increase its financial capacity and to fund the construction of new assets.
The vendor due diligence done by 3E includes the following tasks:
1. Review of the yield assessment
3E performed a re-evaluation of the long-term productions based on the available operating data and 3E’s satellite irradiation data.
On the basis of these data, 3E determined the expected average yield (P50) as well as the yield with different probabilities of exceedance (P75, P90 and P99) in order to quantify risks associated with the project. This takes into account a hypothesis for the degradation of the PV modules according to their technology, as well as for the system availability in the upcoming years.
2. Review of the past operational performance
This task entails an assessment of the past operational performance, based on record of availability, maintenance logs, incidents and alarms registers, and weekly, monthly and annual operator reports. The objective was to validate the operating assumption in the financial model.
3. Technology review of the main components
3E verified the compliance of the modules and inverters with the required international certification (IEC, UL, CE, etc.) and national standards. In addition, 3E reported the manufacturer’s track-record as well as the system components’ guarantee with the industry’s best practice.
4. Technical gap analysis of O&M contract
3E provided a technical review of the different contracts within the EPC and O&M structure to ensure that the contracts are technically comprehensive, complete and compliant with industry best practice and international market standards
5. Site inspection
3E performed a site visit to visually assess the condition of the installations and any factor that may impact the Project's performance
Founded in 2008, Neoen is the leading French independent producer of renewable energy and a major player on the world stage. Today, Neoen has over 4.8 GW of solar, wind and storage capacity in operation and under construction, split on 15 countries and 4 continents. The company is aiming for more than 10 GW by 2025.
About the project
- Project size: 21.7 MWp
- Period: fall 2021
- Location: France
- Client: Neoen