7 Questions for Federico Giannandrea - Partner & Head of Foresight Italy
Federico joined Foresight in 2010 with six years’ experience in renewable energy from Deutsche Bank where he worked on acquisitions, project and asset finance and securitisations for the Global Principal Finance desk dedicated to renewable investments. At Foresight, Federico heads the Italian office which is responsible for arranging, structuring, sourcing relevant financing and managing investments in the southern European renewable sector particularly the solar market. Fluent in English and Spanish as well as Italian, his native tongue, Federico is based in Foresight's UK office.
A part of the Foresight portfolio is located in Italy and therefore the recent regulatory changes must have come as an unpleasant surprise. To what extend is your portfolio impacted by these changes and how do you expect this will impact the revenue streams?
Foresight portfolio, as well as other portfolios, is seriously impacted by the regulatory changes. This latter change in fact is the 5th change in law occurred in the last 24 months to which the drop of 50% in the price of electricity shall be added.
Revenue stream is at least impacted by a -8% as other options provided for in the decree still require some secondary legislation to be further evaluated.
What do you foresee in terms of impact on the management of the assets in the portfolio?
Many projects will be in a no yield scenario for the sponsor due to the covenants of the various financing agreements and therefore renegotiations with lenders are required. This implies the involvement of the original investment teams rather than the pure asset management teams.
Would you say these regulatory changes make professional and tailored O&M and Asset Management even more important for asset owners in Italy?
O&M cost reduction combined with a better plant efficiency can play an important role in the restructuring process of the debt financing in order to allow sponsors to extract yield value from the assets
Can you explain Foresight’s strategy with regards to asset management and O&M and the rationale behind it? Is there a chance this strategy will change in the future?
Foresight strategy is to reduce cost by centralizing the O&M function into a single operator to benefit from economies of scale. The asset management function is already performed by Foresight internally with a very limited part in outsourcing and, within such function, cost reduction and optimisations are key matters.
What are the Key Performance Indicators Foresight uses to determine the performance of its PV assets?
Irradiance / Performance / PR / OPEX vis-à-vis base case and previous years.
Which are the most challenging factors in managing a fast growing portfolio like the Foresight portfolio?
The first challenge is to put in place an appropriate system of checks and balances to monitor properly the assets. The second is to build a team with diversified skills and know-how to be able to cover all areas of interest. The third is to allow the asset management team to quickly get up to speed with the new projects when they become part of the portfolio.
Consolidation is taking place and large investors are increasingly acquiring PV assets in Europe. This results in the fact that for many asset managers PV is a ‘new game’. What would be your most important advice to an asset manager who gets to manage PV plants for the first time?
Don’t underestimate the amount of work required in managing the assets; outsource in the beginning part or all the management to experienced providers and create an appropriate documents storage system.
Federico will be one of the expert speakers at the Solar O&M Europe conference, organized by Solarplaza on 7 & 8 October in Milan.