Technical Due Diligence Review of Generating and Distribution Assets
A confidential US client which provides debt and/or equity financing to power projects engaged K&M to perform a technical due diligence review. The technical due diligence review was for a transaction where the confidential client is providing debt financing to a holding company which has power assets in Peru and Guatemala.
For the assets in Peru, K&M performed a due diligence review of seven power plants including one gas turbine combined cycle power plant with capacity of 871 MW, three gas turbine simple cycle power plants with combined capacity of 1093 MW, and three hydropower plants with combined capacity of 933 MW. K&M reviewed operating and maintenance records, upgrade and expansion plans, inputs to the financial model, and identified major technical risks.
For the distribution company in Guatemala, K&M reviewed available information on conditions of the assets, historic operation data and key performance indicators including losses, collection rates, and service interruption statistics. K&M also identified major technical risks that could impact the company’s performance and financial projections.
K&M works as on-call advisors to provide a range of PPP support services to the governments of El Salvador, Honduras, and Guatemala. K&M’s work includes: screening proposed projects, assessing the viability of candidate PPP projects, reviewing or drafting requests for proposals and terms of reference for advisors, developing budgets for advisory services, reviewing deliverables from advisors, advising on PPP policies and regulation (for example, contingent liabilities), and on-the-job and classroom training to build capacity for PPP unit officials.
The objective of this study is to estimate the cost of LNG transported in truck from an existing LNG import terminal in Panama to large energy users in Costa Rica, Nicaragua, El Salvador, Honduras and Guatemala.
K&M developed a cost model to estimate the cost per MMBtu of transporting small amounts of LNG from an LNG Terminal to each of the countries using LNG trucks and trailers, and multimodal transport (by road and sea) in ISO containers. K&M provided recommendations on the optimal option for transporting LNG. The study also reviewed risks related to relevant trade, tax, and environmental regulations that could affect the cost and/or time of transporting the LNG.