Energy Loan Process

Steps for Energy Project Development

There are several steps and many different players involved in the development of a successful energy project. This explanation of the sysnopsis is intended to highlight the major steps and provide an overview and roadmap through the development process. There are many steps involved, some of which happen simultaneously and some which are required before the next step can be taken. This document divides the process into four general categories:

1. Project Conception and Feasibility
2. Project Design and Development
3. Pre-Construction and Site Development
4. Construction, Operations, and Maintenance

1. Project Conception and Feasibility

During this phase, the goal is to determine what the opportunity is for a wind project at the desired location, whether there is enough wind to justify further investment, and the identification of potential supporters. The developer will use this time to gauge the local community and utility receptivity to the project and make sure there are no major obstacles. The developer will review general wind resource data from established sources in the area, evaluate proximity to transmission lines and access to the proposed sites, perform an initial site

inspection, and begin the interconnection study process. The developer will also want to be aware of any potential environmental or community concerns that will need to be addressed during development. It is the developer' obligation to ensure that the project is acceptable to regulators and the local community.

2. Project Design and Development

If research has shown the potential site to be feasible, the developer will create an initial timeline and perform an initial financial analysis of the project. It is during this phase that the developer will actively seek agreements with landowners for their rights. Landowners will want to ensure that the compensation package is adequate for easements that grant the developer the right to use the wind, solar, biomass, waste, resource, access the land and cross over it, construct transmission facilities and roads, and sell the electricity generated. On participating land, the developer may begin installation of meteorological towers to gather long-term wind data at potential wind turbine sites. The developer will also begin wildlife studies and any environmental review process that is required by the permitting authority to obtain a permit for the project. These studies can include avian impacts, visual impacts, native prairie concerns, archeological review, wetland considerations, and endangered species concerns. They will be performed, as necessary, on any land that has been signed up with the developer for the project. During this phase the developer will also begin a more detailed evaluation on interconnection of the wind project. This will include investigations into the capacity limitations and any load flow analysis that is required. The developer will begin working with the Independent System Operator for the region to obtain an interconnection agreement. This agreement is required in order to connect the wind project to the grid.

3. Pre-Construction and Site Development

During this phase, the developer will tie-up any remaining loose ends before construction can begin, including completing any environmental reviews that are required from the permitting authority. The developer must obtain all necessary permits, including but not limited to, a conditional use permit, road construction/improvement permits, and building permits. The developer will also finalize the project plan and interconnection agreements and begin negotiations on a Power Purchase Agreement with the utility company. The combination of obtaining land rights and permits, an interconnection agreement, power purchase agreement and the developer' revenue projections set the basis for securing financing. The developer will look to retain a construction company for installation of the project and create an initial construction timeline. The developer will also finalize which wind turbine will be most successful for the project and work with the manufacturer and distributor to obtain the number of machines needed.

4. Construction, Operations, and Maintenance

Once financing is secured and the developer has a construction crew and wind turbines, construction can begin.

STEPS INVOLVED from CONCEPTION TO COMPLETION

There is no crystal clear path that works for all projects, but most follow a general outline.

Steps:

1. Project Idea
2. Form a Steering Committee
3. Develop a Mission Statement
4. Select Leaders (Interim Board of Directors)
5. Consider a Consultant
6. Raise your own Seed Money
7. Research and visit similar projects
8. Ask for grants available if the project qualifies
9. Contact builders/contractors if needed
10. Choose a person or entity to do an independent feasibility study
11. Feasibility Study
12. Set a timeline and realistic goals
13. Select a Legal Firm
14. Form Entity/Structure/Governance, etc.
15. Write a Business Plan
16. Prepare Offering Circular
17. Organize Equity Drive/Stock Offering
      A. Advertising
      B. Banker Meetings
      C. Key Player Meetings
      D. Equity Meetings
18. Financing (Contacting our firm: Matik Financial Services)
      A. Equity Needed
      B. Identify Lenders
      C. DOE, USDA, and EPA Loan Guarantee (whichever is necessary)
19. Permitting
20. Site Location (May need to identify earlier for business plan)
21. Sign Design/Build Contract
22. Hire a General Manager
23. Sign Marketing Agreements
24. Construction Oversight
25. Utilities Agreements
26. Write Employee Policy Handbook
27. Hire and Train Employees

Different projects will demand a change in the order of the steps listed. These steps are only to serve as a guide. Some projects are much more involved and will have several additional steps.

AFTER COLLECTING AND SUBMITTING ALL NECESSARY DOCUMENTS TO MATIK FINANCIAL SERVICES:

1- MATIK FINANCIAL SERVICES WILL CONDUCT DUE DILIGENCE AND SUBMIT ALL FINANCIAL AND GOVERNMENTAL PROCESSING FEES THAT WILL BE ASSOCIATED WITH THE PROJECT.

2- UPON COMPLETION OF THE DUE DILIGENCE PROCESS FOR THE PROJECT, MATIK FINANCIAL SERVICES WILL CONTACT WASHINGTON, DC REGARDING THE MEETINGS OF THE GOVERNMENT ORGANIZATIONS AND LEGISLATIVE DELEGATIONS.

3- MEETINGS IN WASHINGTON, DC WILL BE ARRANGED BY OUR LOBBYIST

4- UNDERWRITING SELECTION BY MATIK FINANCIAL SERVICES

A- FINANCIAL UNDERWRITING

B- TECHNICAL UNDERWRITING

5- SUBMITTING PRE-APPS TO THE AGENCIES

6- SUBMITTING COMPREHENSIVE APPLICATIONS

THIS PROCESS TYPICALLY TAKES 2-3 MONTHS FOR THE BORROWERS/APPLICANTS PROJECT(S) TO QUALIFY.