You are screening the acquisition financing of Waihonu Solar, a small solar project in Hawaii, earning fixed-price revenue under a feed-in tariff. The deal sits below your bank's size threshold, and the asset has a history of inverter failures. What is your recommendation to the investment committee: move forward, or pass? Prepare a short deal screening memo with your recommendation and the justification behind it.
You are screening the acquisition financing of Waihonu Solar, a small solar project in Hawaii, earning fixed-price revenue under a feed-in tariff. The deal sits below your bank's size threshold, and the asset has a history of inverter failures. What is your recommendation to the investment committee: move forward, or pass? Prepare a short deal screening memo with your recommendation and the justification behind it.
The case follows Sophie Renard, a vice president in the project finance group at Banque Continentale de Paris (BCP), as she screens a request to finance the acquisition of Waihonu Solar, a 6.5MW solar project on the island of O'ahu, Hawaii. The project earns fixed-price revenue under a feed-in tariff with the local utility, but the tariff expires in 2036, after which the price is set by the state regulator; the asset also carries a history of inverter failures, and the deal sits below the bank's usual size threshold, offset by a sponsor relationship the bank is keen to build. Renard must decide whether the transaction generates enough value, and compensates the bank adequately for its risks, to advance past screening into full diligence.
The case covers Hawaii's isolated, regulated electricity market, the mechanics of feed-in tariffs and the regulatory risk that follows their expiry, and how a lender screens a project finance transaction. Through it, students learn to identify where a contracted renewable project generates value, to surface and weigh its risks, and to reach a clear go/no-go recommendation. Students also learn business memo writing: how to structure an argument and what belongs in each section of a deal screening memo at a financial institution.
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