How Does Enerfip Analyse and Select Projects?

In order to offer quality projects to its investors, Enerfip has a rigorous and comprehensive project selection procedure.

Process

This procedure, also known as due diligence, audit, or project analysis, involves several key steps:

Preliminary Analysis

Preliminary analysis of the financing request: a decision on whether or not to study the financing request in detail. This is the pre-selection committee stage, which takes place every Friday and filters through the many requests we receive each week.

Document Request

If the application passes this first stage, the analyst and project manager then define all the documents required to carry out the Due Diligence and request them from the project owner.

Collection & Analysis of Information

This is followed by a phase of collecting and analysing this information. To this end, a checklist is established to track the requesting, receipt, and analysis of these documents, and a "questions and answers" (Q&A) document is drawn up to obtain additional responses to questions that arise during the analysis.

Summary Analysis Report

Finally, a summary analysis report is prepared for the Selection Committee for final validation (or rejection) of the application. The Selection Committee also has decision-making authority over the structuring or arrangement of the project and the proposed terms (interest rate, duration, instruments, security interests, etc.). It is also the Selection Committee that establishes the project rating. The Sponsor Committee establishes the project owner's rating and reviews it once a year. A very comprehensive article explaining this rating system is available here. Additional analysis or even an external audit may also be required before the project is brought back before the committee. The Selection Committee also meets every Friday. Analysts and project managers make the presentations. The decision-makers are the founders of Enerfip.

Security Interests

During the project analysis process, we identify the associated risks and the security interests that can be implemented to cover those risks, depending on the legal and financial structure proposed. This "mapping" takes into account the availability of security interests, in partnership with the project owner, and is used to adjust the interest rate or return that will be offered to investors. The security interests that are generally offered are as follows:

• Pledge of securities accounts linked to equity interests in companies operating real assets (project company or Special Purpose Vehicle (SPV))
• Assignment of receivables/contract pledge agreement
• Mortgages
• Non-possessory pledges
• Convertible bonds
• Joint and several surety
• First-demand guarantees

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Analysis

The project analysis is based on objective criteria covering the following key areas:

Legal, Technical & Administrative Viability of the Project

A review is carried out by the project manager covering the following elements (non-exhaustive and adapted to the nature of the project):

• Energy yield estimate, review and critical analysis
• Building permits / prior declarations
• Non-appeal certificates, where applicable
• Grid connection request / grid connection agreement
• EDF OA / PDR Enedis certificate
• Technical datasheets for installed equipment: review and critical analysis
• Construction contracts
• Bank loan agreements or validation of the bank's credit committees, where applicable
• CONSUEL electrical compliance certificate
• Power purchase agreement
• Technical inspection bureau report
• Maintenance contracts
• Maintenance reports
• Insurance certificates (public liability, property damage, business interruption, ten-year liability of subcontractors, etc.)

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A regulatory and legal verification is also carried out by analysing the company registration extracts (K-bis), articles of association, and shareholders' agreements of the issuer, and their compatibility with the applicable rules for conducting a fundraise on Enerfip.

Economic Viability & Financial Robustness of the Project

An analyst performs a critical analysis of the following elements when available:

• Asset/liability report
• Statutory auditors' report
• Balance sheets and income statements for the last 3 financial years
• Forecast / Business Plan (BP) of the project company

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The analyst also produces an in-house BP to verify the consistency of the data provided, and a valuation if necessary (for equity or convertible bond projects).

Environmental Excellence, Social & Economic Impact & Local Acceptability

• ICPE (classified facilities for environmental protection) documentation
• Environmental studies
• Local context / site layout plans / photographs
• Municipal council deliberations
• Prefectural authorisations and Energy Regulatory Commission laureate certificate, where applicable