SgurrEnergy authored IFC’s landmark utility-scale solar bankability guide. We revisit the enduring principles — staged de-risking, independent energy yield at P90, a retention- and guarantee-backed contract package, and an honest financial model — that still separate bankable projects from stranded ones.
Overview
When the International Finance Corporation set out to publish the definitive guide to developing and financing utility-scale solar, it turned to SgurrEnergy. Utility Scale Solar Power Plants: A Guide for Developers and Investors was written for the IFC by Alasdair Miller and Ben Lumby of SgurrEnergy, in partnership with the Global Environment Facility and the Austrian Ministry of Finance. More than a decade on, the principles that guide set out still separate bankable projects from stranded ones — and they still shape how we approach every advisory mandate.
The guide’s central idea is that de-risking a solar project is staged, not a single event. A project moves from concept through pre-feasibility, feasibility and development to financial close, and at each gate the developer spends a little more to retire a little more risk. The discipline is knowing which risks to close out when — securing land and grid rights before committing to detailed design, and locking down the energy yield before asking a lender to size debt against it.
That energy yield is non-negotiable. A bankable project rests on an independent, bank-grade yield assessment that quantifies its own uncertainty and reports not just a central P50 estimate but a conservative P90 — the output that will be exceeded nine years in ten. Lenders lend against the P90, so the credibility of the whole financial model depends on how honestly the yield and its uncertainty have been derived.
Bankability, the guide makes clear, is ultimately a contract package rather than a single document. It means an EPC contract with milestone payments tied to the transfer of title, retention held until first generation revenue, and a performance-ratio guarantee; an operations-and-maintenance contract with an availability guarantee, ideally alongside a performance-ratio guarantee, backed by liquidated damages; and equipment warranties that are assignable to the lender and come from manufacturers solvent enough to honour them. No single clause makes a project bankable; the interlocking set does.
Underpinning all of it is a financial model that tells the truth. That means a debt-service-cover ratio that stays above one in every year, visible contingencies rather than buried optimism, and mandatory sensitivity analysis that flexes capital cost, operating cost, yield and interest rates to prove the project survives a bad year. A model that only works in the base case is not a bankable model.
Some things have moved on since the guide was written. Battery storage has become a mainstream part of the utility-scale picture, and the operations-and-maintenance market has begun shifting from performance-ratio guarantees toward availability guarantees and response-time commitments that better reflect what an independent operator can actually control. But the core logic the guide set out — stage the de-risking, insist on an independent yield, build bankability into the contracts, and keep the model honest — endures. It is the logic we still bring, independent of EPC, OEM and equipment-supply interests, to the projects we advise today.
Turn Technical Insight Into a Bankable Decision
SgurrEnergy provides independent advisory, due diligence and engineering support across the full renewable energy project lifecycle.