New Greenfield Coal-fired Power Plant | Laos
EPIC is currently working on an exciting pipeline of new early-stage development projects in Laos. The first such project to be developed is a 300MW coal-fired power plant, using circulating-fluidized bed (CFB) boiler technology (targeting both coal and biomass as fuel sources), the first of its kind in Laos. The project will export power to Vietnam as well as for domestic consumption, providing base-load energy to the southern part of Laos.
We have taken an unconventional yet pragmatic approach to project development, by combining scarce resources with our advisory model and status as a new developer to yield maximized synergies in establishing the business case for new projects and in terms of leveraging EPC and other key partner discussions into potential sources of financing and other mutual benefits.
Distance from Kaluem Coal Mine
~ 5-6 km
First land plot – 15º43’53.4″N 106º44’38.3″E
Second land plot – 15º43’50.4″N 106º44’23.8″E
Focused solely with successful financial close in mind, flexible shareholder and equity earn-in models are being explored that cover:
Project Origination & Conception
- EPIC is taking the lead on project pre-development stage activities such as project definition & concept, process identification, key stakeholder approach and relationship management.
- Through EPIC shareholders, established early partnerships at the local level to mobilize resources and contribute to political risk management and permitting facilitation.
Key Challenges & Mitigation Plan
- Performing detailed diligence up front in order to minimize surprises and delivering a ‘pre-bankable’ concept to potential partners such as other co-sponsors or investors for consideration.
- Factor in deal-breakers in negotiations and discussions with potential partners with innovative solutions and mitigants.
Negotiated Tender Vs Open-Tender
- Chosen equity earn in model to reward initial risk taking while assisting invited partners to de-risk the project throughout the development process and reach financial close.
- Negotiated tender was decided as the appropriate model to shortlist and award exclusive EPC contract in return for equity investment and competitive debt financing.
Process for Co-Development
For co-development project opportunities proposed by partners, EPIC follows a standard private equity model approach to project selection.
EPIC also originates development project opportunities and forms partnerships with other co-sponsors/developers.
Before the investment
1. Receipt of project plan & supporting documentation
- Screening of business plan
- Meeting with management
- Initial due diligence
- Preparation of investment
3. Due diligence
- Business due diligence
- Financial due diligence
- Legal due diligence
- Technology due diligence
4. Valuation & negotiation
- Valuation of project investment
- Term sheet negotiation
5. Submission of the investment recommendation to the Investment Committee
6. Final Investment Committee decision and conclusion of the investment
After the investment
1. Monitoring & support through board participation
2. Value-add through:
- Financial consulting
- Strategic support
- Process optimization
- Sales channel
- Cost reduction
3. Ongoing monitoring of exit opportunities
- Trade sale to strategic players
- Management buy-back
- Sale to other infrastructure-focused PE fund