The technical due diligence (TDD) is our advisory department’s star service.
The TDD aims at performing an integral project risk assessment for any acquisition, finance or refinance either for debt or equity, together with identification and recommendations on mitigation measures.
Our Advisory Department has performed hundreds of TDD for renewable projects. Our team is perfectly aware of the key risks that can exists and how to mitigate them. The scope typically includes natural resource (solar, wind, etc.) and energy production estimations; evaluation of the environmental aspects; evaluation of permits; technical assessment of licenses and authorizations; asset lifetime evaluation; and, review of the contractual technical aspects (EPC, O&M and PPA contracts). The scope can be adapted ad-hoc for each specific project.
When participating on M&A transactions, the scope of the TDD is similar although it is typically adapted to the current project status. As such, a TDD for a greenfield project shall include different chapters than a TDD for a project under operation.
In some cases, the TDD can be complemented with a product due diligence (PDD) which has a similar target in essence (assessing technical risks), but it is focused on a particular equipment to be installed in a specific project. The PDD is typically requested to assess technical risk for the specific proposed equipment (PV module, inverter, wind turbine, etc.). PDD is typically requested for financing (for a particular project) but can also be requested under a different context. For instance, for an IPP which is evaluating different equipment suppliers and requires an assessment on this equipment.
With similitudes with the TDD, a feasibility study is typically requested at an earlier stage of project development in order to assess its technical and economic viability. The scope is totally customized to each project and client’s needs and although it can share content and scope with a TDD, the main difference is related to the fact that there is a project to optimize and to define, while in the TDD, the evaluation is typically for an already defined project.