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Independent scrutiny of income projections helps funder get comfortable with heat project value.

Project summary

  • Providing the Client with a high-level opinion on appropriate valuation multipliers for a 6.2MW Ground Source Heat Pump scheme.

Solution

  • We engaged with the Client to obtain the necessary information about the project.
  • We assessed the reasonableness of the forecast operational term, RHI accreditation, Tier 1 and 2 RHI rates, CoP (coefficient of performance), cost and income projections.
  • We used the investment and discounted cash flow methods of valuation and completed sensitivity analysis.
  • As the comparable method of valuation was not appropriate, we looked at alternative investment types to assist in arriving at an appropriate yield for the scheme.

Benefits

  • Independent analysis cleared internal credit hurdles and gave the Client all-important peace of mind.
  • By providing valuation multipliers the Client was able to carry out further sensitivity analysis as they wished.
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