Enex

Financing

Finance Engineering

In arranging or engineering financing for a sizeable project the sources can be many. In Enex´s experience, great care must be taken in tailoring the financial structure in a manner that best fits the project’s goals, characteristics, local specifics and the owners’ expectations. Several ways and combination of ways are available:

• Grants from state, municipality or funds (EU development funds, WB controlled funds or Foreign aid funds)
• Own capital – shares
• Subordinate loans
• Export import loans, equipment supplier loans
• Bank loans (often syndicated-financing loans)

The following is an example showing type of financing structure that Enex has found to suit well financing needs of geothermal heating projects in developing countries:

Pre-implementation stage	Own capital or grant money
Implementation	Turnkey with state or municipal guarantee
Post implementation	Grants and own capital International financing Financing from local banks Bank loans with state or municipal guarantees Bank loans

Contract form

Enex offers its customers mainly two types of contracts with respect to the influence the customer wishes to have during the plant design and construction:

Consultancy Contract

The consultancy contract is normally formed as “Design-Build” type, i.e. where Enex engineers design the power plant on hourly basis, customer and Enex commonly take care of the component procurement and a subcontractor appointed by the customer erects the plant under Enex supervision. Enex operation team is finally brought in for commissioning and start up.

This type of contract is mainly chosen by customers with their own engineer department or otherwise good knowledge in the geothermal business. Risk allocation on the customer half is grater than in the other types of contracts but his influence on the project also.

EPC (Turnkey Contract)

EPC (Engineering, Procurement, Construction) contracts have become a standard praxis in the power plant business where the customer requires as much cost certainty as possible. This is due to the fact that in a normal EPC contract Enex covers most of the construction risk. For this purpose Enex uses standard FIDIC type of EPC contract with the “Particular Condition” part commonly written with the customer.