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Level 25, 88 Phillip Street, Sydney, Australia-2000 Phone: + 612-8211-0590 E-mail: info@learnprojectfinance.com

Project Feasibility and Financing Checklist

DEVELOPER PROFILE
Overall experience, knowledge and skill set of Developer Team (including consultants) Management of a Tender/Bid process Experience in managing development of projects of similar size and cost Project financing and equity investment experience Experience with relevant technology and design process. Experience with operations and maintenance of similar projects Experience in managing government relations including managing required legislation and regulatory changes (where necessary) Knowledge of industry economics, trends and influencing factors Local knowledge e.g. legal environment, permitting and approval processes, securities legislation, regulatory requirements etc. Specialist expertise e.g. insurance, tax structuring etc. Prior Experience Background/location of projects (developing/developed countries) Role and nature of involvement Results Experience in Country Past projects in Country Results and relationships with key stakeholders including government agencies Reputation in Country Corporate information Annual report Ownership Financial statements 3rd Party information: industry reports, press

www.learnprojectfinance.com , Phone: +612-8211-0590, email: info@learnprojectfinance.com, Level 25, 88 Phillip Street, Sydney, Australia-2000

PROJECT STATUS
1. Project Award Process Timing Competition Transparency Bid Evaluation Criteria e.g. local content requirements Status of key agreements, approvals etc. Critical Permits , Approvals and licences Concession /Off-take Agreement Implementation/Support Agreements from government Site Availability and Access Status of critical agreements: 1. Revenue Agreements 2. Input Supply Agreements e.g. Fuel 3. Engineering, Procurement and Construction (EPC) Agreement Schedule to complete development Tasks, timing, costs Responsible party Milestones Deadlines Support for project Local Regional National Other e.g. local government owned utilities

www.learnprojectfinance.com , Phone: +612-8211-0590, email: info@learnprojectfinance.com, Level 25, 88 Phillip Street, Sydney, Australia-2000

TECHNICAL FEASIBILITY
1. Site Suitability Zoning and prior use (e.g. soil contamination risks) Access to site Interconnection to utilities and third party infrastructure Local support Environmental impact & impact control Need for study, exemption Requirements for legal compliance visual amenity, noise abatement, waste disposal and soil impact, emissions etc. Requirements for financing (e.g. involvement of multilaterals such as the World Bank) Technology options for mitigation of environmental impacts , standards and costs Proposed design & technology (see also Equipment on next page) Off-taker Requirements daily, seasonal demand variations, technical life versus off-take obligations, ramp up/ramp down characteristics and costs Performance track record /reliability Costs capital and operational, Maintenance schedule, overhauls, spares Technical/regulatory compliance over long term Input procurement (e.g. fuel) Input source and size of reserves, distance, transport, quality of reserves, access to alternate sources of supply Interconnection, on-site handling Third party infrastructure/ interconnection Existing or new interconnection Ownership of interconnection Responsibility to build and maintain Dedicated or shared Waste Disposal Disposal method Potential for sales of waste product Composition of waste products and impact of change in input supply specifications/quality Governing regulations www.learnprojectfinance.com , Phone: +612-8211-0590, email: info@learnprojectfinance.com, Level 25, 88 Phillip Street, Sydney, Australia-2000

EQUIPMENT
1. Operational Characteristics Performance Track Record Scalability Efficiency Reliability Availability Environmental Characteristics: Emissions, water needs, water discharge, noise, visual impacts etc. Cost, payment schedule, delivery schedule and deposits Negotiated or competitive bid Pricing and payment terms, variations to price Delivery Schedule Additional Costs e.g. Import duties Physical delivery and transportation considerations Eligibility for ECA Financing Support Guarantees, Creditworthiness for guarantees Performance warranties Creditworthiness of supplier Fitness for Purpose Maintenance requirements Maintenance expertise required Sensitivity to input quality Performance and operational sensitivity to environmental conditions e.g. ambient conditions.

www.learnprojectfinance.com , Phone: +612-8211-0590, email: info@learnprojectfinance.com, Level 25, 88 Phillip Street, Sydney, Australia-2000

PROJECT ECONOMICS
1. Financial Projections Non-recurring costs: Development cost Financing-related costs Construction costs Annual cash flows Revenues o Off-take Product o By-products o Waste Products Operating expenses o Input Costs o Labour o Administration o Insurance o Fees Benchmarks for above assumptions including any risk adjustments. Taxation (local, regional, national, value add, import duties, tax holidays etc.) Financing cash flow assumptions Equity o Return requirements for comparable projects, investments Debt o Comparable debt financing terms including refinancing assumptions o Adjustments for credit quality, market conditions and risk variations Lease financing terms and pricing Reserves funding, build-up, draw-downs Future Capex / Maintenance Expenses Foreign Exchange, Interest Rate and Inflation assumptions Affordability in local market www.learnprojectfinance.com , Phone: +612-8211-0590, email: info@learnprojectfinance.com, Level 25, 88 Phillip Street, Sydney, Australia-2000

Revenue Sources and Agreements

1. Off-take Arrangements Contract type: Minimum take, fixed take, fixed price, variable price Contract status: Signed, negotiated, or proposed Competitively awarded, negotiated Creditworthiness of Off-taker Payment Guarantees and Credit Support Supply proposed relative to Off-taker size/requirements Track record of Off-taker in honouring Off-take contracts Susceptibility to political influence Ownership and privatization risk Alternate purchasers Economic growth in region Merchant Arrangements Demand and Supply dynamics; Quantity and Price Forecasts, internal or independent 3rd party Regulated tariffs Degree of Risk diversification (multiple buyers) Regulatory and industry trends Competitive positioning (short and long term) Marginal Cost Analysis Break Even Analysis Financing Implications Overall Economic trends Consistency with other contracts Third Party Infrastructure: Timing of completion, access and capacity availability on third party interconnecting infrastructure. EPC: Plant completion timing and performance criteria versus delivery obligations under Off-take Input Supply: Pass-through of price changes and input availability to Off-take obligations O&M: Pass-through of expense/cost changes in Off-take price www.learnprojectfinance.com , Phone: +612-8211-0590, email: info@learnprojectfinance.com, Level 25, 88 Phillip Street, Sydney, Australia-2000

CONSTRUCTION CONTRACT
1. Contractor Qualifications e.g. similar projects completed Availability of experienced staff/team for the project Experience in country where project is located Industrial relations record Creditworthiness of Contractor Contract Terms Type of Contract - Fixed price, date certain, turn-key, Wrap-around, subcontractor warranties , assignability of subcontracts Payment schedule and payment triggers , exclusions Foreign Exchange components/adjustments Performance Testing Output , Efficiency, Availability Completion Certification Process - duration of test, testing standards, independence/disputes Warranty period Defects Liability Period Guarantees, Liquidated Damages, Bonuses Performance Guarantees Output, Efficiency, Availability, Reliability Adequacy of Liquidated Damages for under-performance /delay Adequacy of Credit Support to back guarantees Overall Liability Caps Calculation and funding of bonus payments Consistency with other project agreements and financing Timing of Completion, Process of Completion Certification, Performance Parameters vs. Off-take Contract provisions Pass through of CPs, Force Majeure, Change of Law provisions to Off-take. Training of Operator, Essential Spares Insurance Adequacy of proposed insurance package and interface with Operations phase insurance www.learnprojectfinance.com , Phone: +612-8211-0590, email: info@learnprojectfinance.com, Level 25, 88 Phillip Street, Sydney, Australia-2000

INPUT SUPPLY CONTRACT

1. Confirmation of Resource/Quality Source of data and quality Independent verification of amount and quality EPC, equipment compatibility Contract Terms Term vs. Off-take Term Commencement Amount per period (min/max), banking of excess for future use Interruptibility and stockpile/reserve requirements Specification and variability Measurement, billing and payment Pricing and quality adjustments to price Security of Supply over term Supplier creditworthiness Alternate suppliers Dedication of specified resources Guarantees, Liquidated Damages, Bonuses Performance Warranties Adequacy of Damages for non-delivery Adequacy of Credit Support to back guarantees Consistency with other project agreements and financing Pass through of price changes to Off-take. Commencement, ramp up/down Transport Arrangements including Third Party Infrastructure Transportation including third party infrastructure requirements New infrastructure required and timing for completion

www.learnprojectfinance.com , Phone: +612-8211-0590, email: info@learnprojectfinance.com, Level 25, 88 Phillip Street, Sydney, Australia-2000

OPERATION & MAINTENANCE CONTRACT

1. Operator Qualifications & Experience Overall, local experience With specific technology Industrial relations record Specialist expertise Contract Terms Fixed Compensation Variable Compensation Cost pass-throughs Performance Requirements Guarantees Incentives, penalties and liquidated damages Caps on liability Overall Consistency with Off-take Contract and EPC Contract

Taxation
Corporate/Partnership/Trust Depreciation treatment Tax holidays Local, regional taxes Value Added Tax /GST Withholding taxes Tax treaties Other fees, levies, import duties, etc.

www.learnprojectfinance.com , Phone: +612-8211-0590, email: info@learnprojectfinance.com, Level 25, 88 Phillip Street, Sydney, Australia-2000

FOREIGN EXCHANGE
Source of hard currency Country Creditworthiness, F/X reserves, balance of trade, PPP methodology Fluctuation of exchange rates, historical, projected Project reserves Repatriation Convertibility Risk management strategy o Hedging o Hard currency tariff o Tariff adjustments

INSURANCE
1. Construction Builder's all-risk policy Delay in Start Up Insurance Marine Cargo and Marine Delay in Start Up Insurance Property and casualty Workers' compensation Auto insurance Project Errors and Omissions Operations Operator All Risks Business interruption Property and casualty Workers' compensation Auto insurance Political risk insurance www.learnprojectfinance.com , Phone: +612-8211-0590, email: info@learnprojectfinance.com, Level 25, 88 Phillip Street, Sydney, Australia-2000

LEGAL & REGULATORY

1. Corporate / Ownership Foreign investment Approvals Local ownership requirements/approvals On-going ownership requirements Reporting and Compliance Site and Security Property rights Land law Collateral law, liens, security, foreclosure regulations Title insurance Permitting Local, regional, national Assignability of permits and licences Government Support Implementation Agreement Letter of Support Track record of foreign investment Regulatory Considerations Key bodies Environmental, Industrial, Competition and Trade Practices, Corruption Reporting & Compliance Regulatory trends and direction Legal framework and environment Availability of PRI Cover

www.learnprojectfinance.com , Phone: +612-8211-0590, email: info@learnprojectfinance.com, Level 25, 88 Phillip Street, Sydney, Australia-2000

KEY RISKS
1. Credit Risk Off-taker Input Supplier EPC contractor Insurance company O&M contractor Guarantor s Construction Risk Cost over-run Delay Performance Market Risks Price Demand Revenue / Expense divergence Operating Risks Plant performance output, efficiency, availability, reliability Excessive operating expense Economic Risks Foreign Exchange Interest Rates Inflation Political Risks Currency Inconvertibility War and Insurrection Expropriation including creeping expropriation Breach of undertaking

www.learnprojectfinance.com , Phone: +612-8211-0590, email: info@learnprojectfinance.com, Level 25, 88 Phillip Street, Sydney, Australia-2000

KEY RISKS
1. Legal Risks Inadequate legal framework Legislation Case law Administrative law Regulation Dispute resolution Governing law Mediation Arbitration Track record in country International, state, provincial jurisdiction Contract Mismatch Risk Force Majeure Change of Law Third Party Risk Infrastructure Performance

www.learnprojectfinance.com , Phone: +612-8211-0590, email: info@learnprojectfinance.com, Level 25, 88 Phillip Street, Sydney, Australia-2000

FINANCING
1. Funding Sources Domestic Banks International Banks Infrastructure Funds Pension Funds Regional & Global Multilaterals Export Credit Agencies Participants Government State of Financial Market Development Local bank market Capital markets Swap markets and FX markets Commodity hedging Other hedging instruments Availability of PRI Cover Precedents of similar financings Market Conditions Market Liquidity local, global Market Capacity Appetite of International Lenders Financing Terms Market precedents Tenor Gearing & Cover Ratios Margins Covenants & Security

www.learnprojectfinance.com , Phone: +612-8211-0590, email: info@learnprojectfinance.com, Level 25, 88 Phillip Street, Sydney, Australia-2000