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Frame the opportunity — Summarize the asset, sector thesis, and strategic rationale. State whether the investment is availability-based (contracted, government-backed) or demand-based (merchant/volume risk). Identify the fund strategy fit and ticket size relative to fund capacity.
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Map the regulatory environment — Outline the concession/license framework, tariff or rate-setting regime, and key regulatory bodies. Flag any pending regulatory reviews, elections, or policy changes that could affect returns. Note change-in-law, stabilization, or step-in rights. [VERIFY current regulatory status and upcoming review periods]
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Structure the capital stack — Present the proposed financing structure: senior debt (tenor, pricing, covenants, DSCR locks), any mezzanine or subordinated layers, and equity contribution. Include gearing ratios and compare to sector benchmarks. If a PPP, detail the government contribution or viability gap funding.
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Build the base case financial summary — Present key outputs from the cash flow model: project IRR, equity IRR, cash-on-cash yield, DSCR profile (minimum, average, lock-up), payback period, and terminal/residual value assumptions. Show sensitivity tables for the 3–5 most impactful variables (e.g., traffic volume ±10%, construction cost overrun, interest rate shifts, inflation divergence).
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Assess and tier risks — Organize risks into categories: construction, demand/revenue, counterparty, regulatory/political, FX/macro, environmental, and force majeure. For each material risk, state the mitigation mechanism (EPC wrap, insurance, hedging, reserve accounts, government guarantee, step-in rights). Assign a residual risk rating (high/medium/low) after mitigation.
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Benchmark and compare — Provide comparable transaction data: recent infrastructure deals in the same sector/geography, entry multiples (EV/EBITDA, EV/MW, price per lane-km), and achieved returns. Note where the proposed deal sits relative to peers and fund return thresholds.
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Summarize ESG and impact — Quantify where possible: estimated CO₂ avoided, jobs created during construction/operations, community benefit commitments. Map to relevant frameworks (EU Taxonomy eligibility, GRESB score drivers, SDG alignment). [VERIFY fund-specific ESG reporting requirements]
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Draft IC recommendation — State the clear recommendation (invest/pass/conditional), the proposed terms (entry price, equity commitment, key conditions precedent), and any outstanding due diligence items or conditions that must be satisfied before close.
