Technical Due Diligence for Minihydro Power Plant Project in Indonesia

Abstract

Technical due diligence as part of the bankability due diligence carried out by the bank for the minihydro power plant (MHPP) project which will be financed for its construction. This research is to determine important variables as the object of due diligence and to conduct technical due diligence based on the variables. The important variables as the object of due diligence were obtained from interviews with group of experts who have experience in the construction of MHPP. The results of the interviews were processed using the Relative Importance Index (RII) and the Analytical Hierarchy Process (AHP) method to determine the risk ranking/weight. The due diligence process is carried out on submitted project documents and onsite verification to three sample of MHPPs at West Sumatera Province, Indonesia. Based on the assesment to each variables to the sample MHPPs, we get result that one MHPP does not ready to be financed from a technical point of view.