Case Study: Investment Cost Budget

• Super Wind Investor Ltd. ("SWI") got the opportunity to acquire a usedVestas V44 600kW turbine that has been installed in Northern Germany 14 years ago.
• The turbine is operating under the German renewable energy feed-in tariff scheme (EEG-Renewable Energy Act) which is remunerating the turbine for a period of at least 20 years from the commissioning date.
• SWI can operate the turbine for at least 6 additional years under the same conditions as before (same feed-in tariff).
• SWI considers an investment under the pre-condition that it can raise a bank loan for co-financing.
• Turbine acquisition date shall be 01 January 2017.
• Let's show SWI how to evaluate the project from a banker's perspective!
• The total upfront investment costfor the used wind turbine is
• EUR 230,000.
• The investor can provide EUR 90,000of equity. He needs a bank loanof
• EUR 230,000 Investment
• - EUR90,000 Equity
• = EUR 140,000Bank loan =3.5%