Page 61 - Phelan Energy Green Ammonia Plant Egypt

Key Risks, Allocation and Mitigation
Type of Risk Nature of Risk Risk Risk Allocation Risk Mitigation
Obtain and Maintain Licenses
Commencement of Project development is contingent on the SPV obtaining licenses for setting up the company, land clearances, and export licenses amongst others. Delay in these licenses can lead to delay of commencement and in turn loss of potential revenues
Project Company
• Experienced legal, E&S, tax, and other advisors
• Experienced sponsor to ensure regulatory compliance
• Support from Egyptian government
Demand & Market Risk
These risks relate directly to the revenues over the entire project life. Any volatility in off-take prices, reduction in demand or absence of off- takers interested in buying green ammonia from this project will impact the cash flows for the Project
Off-taker(s)
• Long term, fixed price offtake with adequate termination protection
• Strong Demand Outlook
Construction (Cost & Time)
Delays in the Project’s Scheduled Commercial Operations Date can erode potential revenues, whereas a significant increase in Project construction costs can reduce the returns for Sponsors
EPC Wrap Provider
• Fixed Price lumpsum turnkey contract
• Delay and Performance LDs
Construction (Design & Implementation)
Deviations from the optimal technical design required for the Project can have significant impact on the Project operations and the quality of output
EPC Contractor
• •
• •
Reputed firms to validate EPC designs Experience and partnerships for plant’s major components
Fully wrapped LSTK EPC contract Provision of adequate LDs in EPC contract
- Low risk - Medium risk - High risk © Phelan Energy Group
61