Grid Essence has a robust approach to risk management. We manage our risks across the whole supply chain, by employing effective risk handling measures.
Development & Acquisition Risks
Rigorous criteria for selecting the most viable projects are applied to ensure the bankability of the project and to assure safe construction of the project. Due Diligence (DD) processes (“Red Flag” approach) are conducted as a condition precedent to enter the transaction process.
A sound and proven acquisition framework, business modelling capability, banking expectation management are employed to ensure profitability over the entire plant lifecycle. We have strong capabilities in full M&A and in DD processes (Technical, Legal, Administrative and Financial), plus in-depth knowledge of the local regulation and of the main players (both central and regional level) with the help of strong legal partners with proven track record.
Our team includes highly qualified experts, with excellent skills in both project assessment and project management across all stages (definitive design, construction, test & commissioning) to guarantee the performance and synchronization of all players involved.
Turnkey, lump–sum EPC contracts with full guarantee packages are signed with reputed international EPC contractors to safeguard the project from execution risk.
Primary suppliers are selected based on proven technology and strong track record with performance guarantees that run through the full plant life cycle.
Experienced partners capable of handling operation-related guarantees and penalties are selected. Operation & Maintenance service providers are incentivized by linking production levels to remuneration. Training and personnel provision secured through the EPC contractor.
Equity investments are hedged against local currency, wherever required based on a thorough risk assessment by the Grid Essence finance team.
Interest rate risks are mitigated by fixing the rates for the term of the senior debt, wherever this can be done economically. Country risks and default risks are generally hedged by purchasing appropriate financial instruments.