The bankable financing dossier of a renewable project

Raising debt for a solar, wind or storage project means convincing a bank that the project cash flowswill repay the loan with a safety margin — without recourse (or with limited recourse) to the shareholder's balance sheet. It all comes down to the financing dossier: the financing plan, the financial model, the contracts and the studies. This guide describes what a lender expects and how to assemble a dossier that passes due diligence. For the mechanics of the structure itself (SPV, senior debt, ratios), see the project finance & senior debt guide.

1. What a bank expects: the DSCR / gearing / security triangle

A project lender assesses three things at once:

• Coverage (DSCR): each year, do the available flows cover the debt service, with a cushion? This is the heart of the reasoning — see DSCR, IRR, NPV, LCOE.
• Leverage (gearing): what share of CAPEX is debt-funded? The more secured the revenue, the higher the acceptable gearing.
• Security: pledge over the SPV shares, accounts, contracts and receivables — to be repaid from the project on default.

The bank always reasons in prudent generation (P90), never P50: the dossier must show the DSCR holds even in a degraded yield scenario.

2. The financing plan: uses ↔ sources

The financing plan is the founding table of the dossier. It balances what the money funds (uses) and where it comes from (sources):

The debt / equity split sets the gearing, hence the leverage on the equity IRR. This is the plan our technology pages break down — solar & renewables, wind and battery / storage.

3. Sizing the debt: DSCR sculpting and P50/P90

Two methods coexist to set the debt amount:

• By gearing — a fixed percentage of CAPEX. Simple, but rigid.
• By sculpted DSCR — repayment is calibrated year by year to hold a target DSCR. The debt profile then follows the cash-flow profile (useful when generation or price vary over time).

The « sustainable » amount is the one that respects the target DSCR in P90. A strong dossier shows both curves (P50 for the base case, P90 for the bank case) and the gap in raisable debt between them — often the credit committee's first question.

4. The financial model: traceable, bankable assumptions

The financial model is the centrepiece. To be bankable, it must be:

• traceable — every assumption (yield, price, indexation, OPEX, staged CAPEX, taxes) is sourced and editable, not buried in a formula;
• prudent — P90 generation, sensitivities (price, rate, availability) and explicit stress cases;
• complete — sculpted debt, DSCR and LLCR, DSRA, rate hedge, taxes;
• auditable — lenders and their advisors must be able to replay every calculation.

This is exactly where a fragile spreadsheet costs time: broken formulas, diverging versions, untraceable assumptions. A model where each scenario is an isolated version and every result is auditable shortens due diligence — see the structure of a renewable financial business plan.

5. Reading a term sheet: the clauses that matter

Before legal documentation, the bank issues a term sheet. Every clause must be reproducible in the model:

6. The complete dossier: the checklist

Beyond the model, a financing dossier gathers:

• the financing plan and the financial model (P50 base case + P90 bank case);
• the independent yield study (P50/P90);
• the revenue contracts: feed-in tariff, PPA or merchant;
• the EPC (construction) and O&M (operations) contracts, land and grid connection;
• the permits, insurance and the due diligence plan;
• at group level, the portfolio view if several projects are financed together — see portfolio valuation (NAV).

7. Tailoring the dossier by technology

The logic is the same everywhere, but the key assumptions change: yield and power curve for wind, revenue stacking and cycles for battery / storage, contracts and taxes for solar & renewables. A convincing dossier adapts the DSCR / gearing / security triangle to each risk profile.

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