Options Analysis for the Caribbean Water Utility Insurance Company (CWUIC)
The IDB Group, through the assistance of K&M Advisors LLC (K&M) and Alliant Insurance Services (Alliant), has completed the initial development of the proposed Caribbean Water Utilities Insurance Company (CWUIC). CWUIC will be a mutual insurance company for water utilities in the Caribbean. In this phase of development, CWUIC’s main components, governance framework, potential sources of funding, and target members have been largely defined. As a result, the IDB Group plans to submit a proposal to the Green Climate Fund (GCF) requesting funding for CWUIC. Before the IDB Group submits the proposal to the GCF, it must define the entity—whether an existing one or one to be created—in which CWUIC will be established. The K&M team is advising the IDB on the best alternatives for establishing CWUIC
The National Water Commission (NWC) in Jamaica is working on a multi-year financial planning exercise. In support of this work, the Inter-American Development Bank (IDB) contracted K&M to develop an advanced, detailed, and dynamic financial model. To further support NWC in its multi-year financial planning exercise, K&M is providing capacity building and training to the NWC regarding the use of advanced simulations with the financial model. The K&M model will allow NWC to make detailed 10-year projections of the financial statements.
Cerro Dominador Solar Power Plant is a 210-megawatt (MW) combined concentrated solar power (CSP) and PV plant located in the Antofagasta Region of Chile, about 24 kilometers (15 mi) west-northwest of Sierra Gorda. The 100 MW PV plant is already in operation and the 110 MW CSP plant is in commissioning. The CSP plant includes a 243 m receiver tower, 10,600 heliostats, molten salt energy stage to support plant operation at 100% load for approximately 17 hours, steam turbine-generator, and other auxiliary equipment. A private investment client is planning on investing in the project and engaged K&M to perform project technical and market due-diligence review with the major focus on a 110 MW CSP power generation facility.
The Inter-American Development Bank (IDB) contracted K&M Advisors to develop financial simulations that have been used to assess the impacts of COVID-19 on water utilities in the Caribbean, and to identify measures and/or instruments that can be put in place in the short term to mitigate those impacts. The Ministry of Public Utilities (MPU) of Trinidad and Tobago has requested that a financial model and accompanying user manual be prepared by K&M Advisors specifically for Trinidad and Tobago’s Water and Sewerage Authority (WASA). In addition to modeling the impacts of COVID-19, this financial model will also consider the regulatory framework, economic structure, water and sanitation sector in Trinidad and Tobago, as well as the structure of WASA. The financial model will be used to make strategic operating and policy decisions related to improvement of the utility and provide support the government in its re-negotiation of desalination contracts. In particular, the model will help WASA and the MPU prepare a plan to be submitted in November 2020 to cabinet level officials of the Government of the Republic of Trinidad and Tobago.
A confidential Colombian equity fund which provides debt and/or equity financing to power projects engaged K&M to perform a technical, environmental, and social due diligence review of a gas-fired reciprocating engine power generation project composed by six (6) Wartsila 20V34SG generating units, three (3) Jenbacher JGC 320 GS-SL gensets as well as a dedicated gas supply line and 115kV electric transmission line. The technical due diligence review was for a transaction where the confidential client is interested to acquire and operate the asset. K&M’s scope of work included technical due diligence of the power generation assets, as well as environmental legal compliance, and compliance with IFC Performance Standards on Environmental and Social Sustainability.
A U.S. based multi-billion dollar hedge fund was considering an investment in a new company that would provide small-scale LNG shipping and Floating Storage and Regasification (FSRU) services. K&M was hired by a hedge fund to identify and quantify the addressable market for small-scale LNG shipping and FSRU terminals in the Caribbean, West Africa, and Southeast Asia.
FortisTCI Limited (FortisTCI)—the electricity utility in Turks and Caicos with an aggregate generation capacity of 90.7MW and over 15,000 customers—has retained K&M Advisors to conduct a vigorous cost of service study. FortisTCI has seven service areas with multiple customer categories. Working closely with the FortisTCI team, K&M will develop a dynamic financial model that will calculate the cost of service and establish cost reflective rates by customer category for each service area. The model will calculate the cost of service on a historical basis and on a forward-looking basis using projections for 2021 to 2025. K&M will present the cost of service and proposed rates by customer category to the executive team at FortisTCI and provide recommendations resulting from the work undertaken.
The National Electric Power Company (NEPCO), a national electric utility responsible for operating Jordan’s transmission network planning system expansion including procurement of new generating facilities selected the Attarat Power Company, a private company incorporated in Jordan, whose shares are owned Malaysian, Chinese, and Estonia entities, to develop, design, finance, construct, test, commission, complete, own, insure, operate and maintain a 470 MW (net) oil shale fired power plant (together with the mine and water extraction facilities). The project consists of two 235 MW (net) unit. The project will sell its capacity and energy to NEPCO under a long-term Power Purchase Agreement (PPA). K&M was selected to serve as an Independent Engineer on the project serving both NEPCO and APCO and getting paid by both parties on a 50/50 basis.
A confidential US client which provides debt and/or equity financing to power projects engaged K&M to perform a commercial due diligence review to support a loan transaction for the Inkia generation portfolio.
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.