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Energy & Power

Lincoln International has developed a leading M&A advisory practice in the Energy & Power space. The firm's market-leading reputation for achieving superior client outcomes is built upon its significant sector expertise, transaction experience and extensive industry relationships. Lincoln International’s history of successfully positioning Energy & Power components, equipment and services businesses to drive competitive sale processes has repeatedly resulted in compelling outcomes for its clients, translating into a high level of repeat business and client references. Lincoln International’s significant transaction experience and industry expertise and relationships, built on its unmatched track record of successful transactions and client outcomes, have made it a leader in middle market Energy & Power M&A advisory.


Energy

  • Oil (traditional and unconventional)
  • Gas (traditional and unconventional)
  • Coal
  • Nuclear
  • Renewables
  • Solar

Power

  • Generation
  • Transmission
  • Distribution
  • Substation
  • Energy Management / Smart Grid
  • Energy Efficiency / LED

Areas of Focus

  • Consulting and engineering services
  • Distribution
  • Engineered components, products and systems
  • Environmental, waste collection & disposal and remediation services
  • Outsourced maintenance, repair and construction services
  • Test, inspection and certification services

Related Transactions



Welcome to Lincoln International’s Renewable Energy Cost of Capital Insight

Renewable energy represents a niche segment of the overall infrastructure asset class. These assets need to be approached slightly differently due to the varying risk return profile associated with long-term incentive schemes, financial leverage, construction / technology risks and input / output price volatility.

Typically, when valuing renewable energy projects, an income approach is utilized. Sometimes, the capital asset pricing model (“CAPM”) is used in determining the appropriate cost of equity and in turn the weighted average cost of capital (“WACC”). Because some of the risks associated with equities are not present in renewable energy assets, the CAPM model is likely not the most appropriate method to rely on in deriving the appropriate discount rate.

As the pricing for renewable assets is competitive and unique to the specific aspects of the asset, the implied cost of capital (or IRR) from comparable transactions is a better indicator for valuing projects. This data is not readily available and so we survey various funds to obtain the latest view on where cost of capital is across various European markets. We ask one simple question: What most closely matches the cost of capital for the following secondary market deals? We ask this with respect to levered and unlevered secondary market ground mount solar, onshore wind, offshore wind and biomass deals. We ask this question across five key markets: the UK, Germany, France, the Nordics and The Republic of Ireland.

Lincoln International’s Clean Energy Cost of Capital Survey is conducted semi-annually, and results are distributed to all funds who participate.

For more information on this survey and our valuation capabilities, please visit our Valuations & Opinions page and contact:

Tomas Freyman, Managing Director, Valuations & Opinions Group at Lincoln International in London tfreyman@lincolninternational.com or +44 7794 243 650



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