Page 142 - UUBO Deal Academy 2020 - Materials
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Major regulatory risks and mitigation
approaches
Risk Description Mitigation strategy
• Explore letters of cooperation from local and state
gov’ts supporting project
• Government changes laws or policies • Consider PPP structure (not ownership but similar
Change in Law impacting the industry (or a particular ways of government buy-in); Register your
Risk developer/project) in a materially adverse business with the IPC
way. • Ensure strong community relations, so they can
become advocates for project with local
government if necessary
• Permit not approved or approval process • Do not begin construction until permit is issued
prolonged significantly, possibility of it • Build flexibility into financing and development plan
Approval delayed
affecting other financing, regulatory, or • Explore AMDA advocacy
development timelines • Advocate for clarity on government processes
• Main grid expands to mini grid customer
households, supplying electricity at a lower • Engage lawyers and gov’t liaisons to work with
Grid arrival cost without interconnection to existing government on compensation process outlined in
without mini grid distribution network or mini-grid regulation;
compensation compensation to developer • Pursue political risk insurance
(<100kW) • Legislated compensation does not • For interconnected mini-grids, negotiate longer
sufficiently compensate developer for terms in tripartite agreements where possible
expected returns
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