Forecasting cash at renewable

Ah, forecasting cash for a renewable energy company with multiple projects and debt facilities, that's quite the task! But don't worry, I've got some insights that might help you out.

Firstly, it's important to understand that renewable energy projects, like the ones you're dealing with, generate cash flows through operations, which get distributed via a "waterfall". In a traditional solar "back levered" deal, you'll normally find a "tax equity" investor as the first to get paid in the waterfall rather than debt.

Now, when it comes to forecasting cash, you'll need to consider the following:

1. The EBITDA: This is the cash flow stream available for debt service.
2. Tax Equity Preferred Payments/Cash Share: These are the payments that are deducted from the EBITDA.
3. Reserves: These are any reserves that tax equity may require.
4. Debt: This will normally include all sorts of other reserves and conditions that need to be met before equity gets paid out in the next stage of the waterfall.

Remember, the key distinction here is that while most corporate PE is geared towards increasing the value of a firm for an exit multiple, in renewable energy PE, we're solving for some sort of levered IRR, and a MOIC. A lot of the value creation is performed upfront in the pricing/bidding/negotiation/structuring process for acquiring the assets.

So, to forecast cash, you'll need to take into account all these factors for each of your 200 projects. Yes, it's a lot of combinations, but with a structured approach, it's definitely manageable.

And remember, if you're feeling overwhelmed, don't hesitate to reach out to the WSO community. There are plenty of folks who've been in your shoes and would be happy to share their experiences and insights. Good luck!

Sources: Renewable Energy PE Overview, How do you forecast price increases for a large company with a diversified portfolio of products when creating a revenue schedule?