Principals of Project Development
What are two of the four development domains?
What is the name of the process of retiring “project” risks to achieve a physical operating asset with positive economics?
Project Development
Is the following statement True or False:
More Engineering equals Better Defined Scope equals Lower EPC Bids.
TRUE
Is the following statement True or False:
Effective risk allocation means assigning residual risks to the parties best able to assume them, considering capacity, control, and creditworthiness.
TRUE
What is one metric commonly used to evaluate the financial viability of an infrastructure project?
IRR, MOIC
Is the following statement True or False:
It is best to set up a special purpose vehicle to insulate each project.
TRUE
What kind of firms or entities are the most likely ultimate owners of infrastructure projects following their demonstration of steady cash flows?
Pension Funds, Insurance Firms
How many phases are there in the project development process?
Five (5)
What is one common mistake Developers often make after the EPC price comes in too high?
Is the following statement True or False: Technology performance insurance can cover construction delays and cost overruns.
FALSE
Is the following statement True or False: The IRR metric considers the time value of money
TRUE
Is the following statement True or False:
FOAK projects are typically financed by non-recourse debt.
FALSE
What is the definition of infrastructure?
Interrelated system notes and links
In the technical domain, name one final deliverable that creates asset value.
Anyone of site studies completed, FEED design, or permits secured
What are two of the four most common EPC contract structures?
Is the following statement True or False: Developers who engage insurers early can design coverage that better meets investor and lender needs.
TRUE
Is the following statement True or False: You should not assume anything in a financial model
FALSE
What is one major risk that will reduce Developer’s perceived credibility and increase fundraising difficulty?
insufficient project documents
poorly negotiated commercial agreements
high project costs
major project scope gaps
What are the three "things" that Ken would like you to leave Dev U remembering?
What are the two primary uses of capital during development, and which one do financiers value more?
3rd party* and soft costs
What are the three Front End Loading (FEL) stages that occur before EPC bidding?
Conceptual Design, Preliminary Engineering, Project Feasibility
Is the following statement True or False: Underwriters evaluating first-of-a-kind technologies look only at proven operating history and ignore third-party validation or testing.
FALSE
Is the following statement True or False: Techno-economic calculations should be omitted from the financial model.
TRUE
What is one way a Sponsor can be compensated for performing its role in a project finance structure?
What is the fundamental objective of project development?
Producing documents as fast and as cheap as possible until deciding to either stop or continue funding
What is the name of the role that oversees the overall project execution strategy and is usually your first development team hire?
Project Executive
What is the rule of thumb for the range of total cost of engineering when expressed as a percent of total project CAPEX?
Anywhere between 4 to 10%
Name one thing underwriters look for when considering technology performance insurance.
Reliable test data, independent third-party validation, or achievement of project milestones
Is the following statement True or False: The higher the IRR, the higher the MOIC
FALSE
What is one major risk that Offtake agreements typically transfer to Developers?
1. Off-taker credit and performance
2. Project performance guarantee
3. Deadlines and off-taker approvals
4. Project collateral support requirements