The Brave New World of U.S. Power Project Finance

Abstract

In today's restructured competitive power market, there is no single template for financing a generating plant. To the contrary, project sponsors seeking to enhance reported corporate earnings and shareholder value are practicing very sophisticated financial engineering. On the equity side, they are blending power purchase agreements (PPAs) with tolling and merchant arrangements. On the debt side, they are crafting highly structured financings that often involve miniperms, gencos, bonds, and project lease structures, often in surprising and innovative combinations.