Case Study – Project Evaluation and Due Diligence



Case study

Rhombus was engaged to advise on a greenfield renewable solar project in Burkina Faso in which the client was considering a mezzanine level investment in the public‐private partnership. Successfully completed in Q2/2015, the due diligence assignment required, inter alia:

  • Reviewing the relevant contracts (in the French original), to identify the crucial terms and conditions1 agreed between the project’s sponsors and three separate instrumentalities of the Burkinabè government.
  • Against the backdrop of an abrupt change of government, traveling to Ouagadougou to meet with the Transitional authorities and obtain confirmation that they recognized, and intended to uphold, the provisions in question;
  • Proceeding to the project site, located 260 km. outside the capital, to engage with members of both local administration and civil society in order to assess the attitude of the host community towards the project.
  • Visiting Abidjan to meet with senior officials of the African Development Bank’s infrastructure department to verify the institution’s reported interest in: (i) investing the project as a senior lender; and, (ii) arranging for BOAD (W. African Development Bank) to co‐invest at the same level in capital structure.
  • Engaging with the World Bank’s MIGA affiliate to ascertain the precise scope of its political‐risk insurance coverage with specific reference to loss or damage sustained in the context of war and civil disobedience.

1Of particular importance was the relationship between the project’s prospective liability under the power-purchasing agreement and the liquidated damages receivable from the engineering contractor in the event of construction delays and/or output shortfalls.