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Ridgway Reservoir Micro-Hydro Project Loan Feasibility <br />Page 19 of 42 <br />FINANCIAL ANALYSIS <br />As noted above, construction cost estimates vary from approximately $13M to $18.2M. In <br />addition to construction cost estimates, another key variable which will impact the �nancial <br />return from the project is the value of the energy and the RECs which will be generated by the <br />project. Finally, the price of loan funds will also have a large impact on the financial feasibility <br />of the project. <br />The cash flow analysis shown below is based upon the following assumptions: <br />• Total construction cost of $15M. <br />Energy/REC values which start at a mid-range value of 5.5 cents/kWh and then escalates <br />at a rate of 3°Io annually <br />Loan funding totaling $13.SM at an interest rate of 2% for a period of 30 years. (Note: <br />the chart below shows "CWCB Debt" totaling $13.SM at a 2°Io interest rate for a period <br />of 30 years. Tri-County Water is planning to borrow only $lOM from CWCB; the other <br />required funds in the scenario below, $3.SM, will be borrowed from CWRPDA and <br />capital reserves at the same loan rate. It is simply shown below as one column titled <br />"CWCB Debt" column for the sake of chart simplicity). <br />Balance of equity funds as needed provided by Tri-County Water. <br />Pending further discussion with CWCB, additional economic models can be prepared showing <br />the effect of a range of different variables including variance in construction cost, variance in <br />energy values, and variance in loan rates, lengths and terms. <br />