A bankable project requires careful and professional planning, says Ian Greenstreet, Chairman at Infinity Capital Partners & Board Director at Diamond Bank. He suggests the following when planning for a bankable power project:
- You need the right experts and advisors during the planning process
- The right engineering, procurement and construction contractors must be employed from the beginning
- A project needs sponsors, with high performance metrics and shared values
- Location, resources and financial backing must be properly assessed before the project commences
- A proper framework and tariff regime must be in place because political backing can be unreliable
- Must have the right fuel supply for the project
- The right commercial structure is key-must be self sustainable for lower risk
- Varied number of customers (industrial, retail, utilities) and ensuring their credit worthiness before signing a long-term contract
- Do not rely heavily on government for support as misjudgements can occur.
He adds that a decentralised power approach for Africa is the way forward as locals are given ownership of their power needs which encourages economic activity.