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Biomass Project Due Diligence

If the credibility and capability of the consultant/supplier who does the feasibility study is not known, then, it is better to conduct a project due diligence on technical and financial aspects. From the technical point of view, it is always better to recheck the selected technological option, fuel supply, associated risks and the selected steam cycle.

We often came across several projects, in which there was a mismatch between selected boiler and turbine system. Also, in several cases, very poor steam cycles were used. A technical due diligence will give answers to several technical aspects and sometimes even costly mistakes can be avoided resulting in the savings of several million USD. The due diligence can also be used to check whether the equipment or EPC cost is reasonable. The ideal time to conduct due diligence is before signing the equipment supply contract.

In addition, a financial due diligence will help in validating all assumptions and calculations. There may be some errors while doing complex calculations in financial models. It is worth spending money on project due diligence to save several million USD as project revenue in its life cycle.

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