Building Value and Trust in Emerging Markets

Unlocking Value Through Consulting, EPC, and O&M Services

Our vision is to be the most trusted supplier of power station consulting, engineering, and design services in emerging markets.  At USP&E, we believe that every power station project we have completed has made us a better company and positioned us to help our clients unlock value and minimize risk.

Our goal and focus, across all of our divisions, is to drive added value by lowering our clients’ power station operational costs.  We are able to achieve this goal by using our varied and extensive total solution expertise in power station Feasibility Studies & Planning, Engineering Design, Procurement, Construction, Construction Management, Commissioning, Project Management, and Project Handover. USP&E Consulting (Africa & Asia) focuses on supporting owners and executive teams in decision making for major project development opportunities by using our value-added expertise and various business decision tools, which include Conceptual Feasibility Studies, Definitive Feasibility Studies, Front End Engineering Design (FEED), and a Final Investment Decision (FID).  The FID is the trigger point decision making tool that leads to the final Project Execution Phase, which includes Engineering, Procurement, and Construction (EPC).

Step One: Conceptual Feasibility Study (Desktop Study)

A Conceptual Feasibility Study involves a technical and commercial examination of a project’s potential for success. The Study determines whether the project is viable given the infrastructure required and the resources available to the company.   The Conceptual Feasibility Study (CFS), or Class 5 estimate, is often prepared at the outset of the development phase of a project. During this scoping phase, all critical design alternatives are examined, assumptions are documented, and a preliminary project execution plan is established.  The CFS is defined as an order of magnitude estimate, including a contingency, accurate to +/- 20%.  USP&E offers a robust CFS practice and can often complete a CFS within 30-60 days, depending on the level of detail required.

–Nicoli Machiavelli

Step Two: Definitive Feasibility Study (Bankable Feasibility Study)

USP&E Consulting LLC’s Africa and Asia practices create robust economic models that shareholders, banks, and investment committees require prior to a Financial Investment Decision (FID). Accurate to +/- 10%, our Definitive Feasibility Study (DFS) provides professional financial projections relative to the power station of each infrastructure project (mining, hospitality, oil and gas, manufacturing, etc.).  Ultimately, a DFS is a comprehensive, forward-looking, assumption-driven, economic, and technical project report to be used by the owner’s executive team as it seeks to work with the Board of Directors (BOD) to determine the net present value (NPV) of the proposed asset over its life so as to reach a positive FID and achieve the organization’s target outcome: enduring profitability.

Feasibility Program Management Team:  Integrity = Honesty + Expertise

In order to reach FID, each Definitive Feasibility Study is guided by a feasibility program management team that meets at the outset of the Study to set layout site conditions, Study deliverables, load lists, eTap reporting and transient simulation strategies, and a target outcome.  It is important to the integrity of each Study to maintain that the real outcome is always uncertain at the threshold of a Study, and targets and objectives may not be achievable.  The target outcome is the potential project design that achieves a positive FID and collateralizes the infrastructure required to operate the venture.  This target outcome is one where risks are regulated and operational efficiencies optimized in order that the total cost of ownership of the infrastructure is minimized and net present value is maximized.

In the final recommendations section of each Study, USP&E chooses and highlights aspects of the power station configuration with the most suitable technical and financial characteristics, starting with a review of all capital costs (capex) and detailing all operating costs (opex) over the full life cycle of the project.  These DFS costs are built upon pricing quotes and specifications from manufacturing, shipping, construction, testing, maintenance, and fuel supply contractors and vendors.  The objective is to clearly identify the most reliable, affordable, fuel efficient, renewable, ideally suited power station configuration for each project in order to optimize the organization’s ideal outcome: enduring profitability.

A +/- 10% DFS, or Class 2 estimate, supplies the executive team with all basic design documents, such as P&IDs, layouts, electrical single lines, construction schedules, and project execution plans. USP&E can typically complete a full DFS in 3-6 months, depending on the complexity and range of variables unknown at the time of the DFS program management kick-off meeting.

Step Three: FEED

Once the power station DFS is completed, it is time to begin the Front End Engineering Design (FEED).  The FEED is a critical step where an EPC contractor is selected to perform the design engineering required in order to truly integrate the various aspects of the DFS-recommended power station solution including:

• Basic fuel farm design and integration
• Power station layout and site integration
• Civil works drawings, layouts, and integration
• Control systems design and integration
• Full eTap load and transient simulations and associated reporting
• Fire protection, safety, and risk management design and integration

The FEED is a critical building block that must be completed prior to placing the project out to tender. However, if USP&E Consulting is hired for a comprehensive Class 2 DFS assignment, the FEED can be incorporated into the DFS process in order to streamline the workflow and reach FID sooner, at the client’s discretion.  If the DFS offers a power station solution that is compelling, with a low cost per kWh and high projected internal ROI, the FEED will be initiated to flesh out in more detail the electrical, mechanical, petrochemical, and thermal properties and layout of the proposed integrated solution.

Step Four: FID

In order to reach a Final Investment Decision on a major infrastructure project in the emerging world, the CFS, DFS, and FEED need to be in strategic alignment.  For the FID to be positive and the project to move forward, the project will often need to compare favorably to the other projects the organization is working with.  Most importantly in emerging markets, the FID will be influenced by both the project’s projected profitability and its social impact.  Social impact is driven by the project’s potential to transform communities, economic systems, and lives through job creation, infrastructure improvements, and relief work.

Even when target outcomes are met and the DFS and FEED point toward a robust, profitable, and transformational project, sometimes the risks and uncertainty in certain frontier nations are simply too high when compared with current commodity spot rates or other market conditions.  In this case, the Board of Directors may delay the FID until local or international political and market conditions change. When the executive team and Board’s target outcomes and Socio-economic and Transformational Opportunities for Restoration and Yield (STORY) are detailed and aligned, the positive FID triggers the project execution and engineering, procurement, and construction phase (EPC).  Regardless of the delays to the FID, the winning EPC contractor will always be expected to commission the new assets in the shortest lead time possible.

Step Five: EPC

When USP&E Consulting is given the opportunity to assist clients with their CFS, DFS, FEED, and FID needs, tremendous trust and partnership is forged. Once the consulting engagement has concluded, USP&E Africa, our power station EPC and Operations & Maintenance (O&M) firm is often engaged to build what we have so carefully worked to design. Supported by our offices in Sierra Leone, Johannesburg, and Frisco, Texas, we have experience working in Guatemala, all of North America, and in numerous countries across the continent of Africa.  Our EPC practice is built upon the key USP&E pillars of world class construction:

• Safety first
• Quality control
• On-time delivery of energy
• Risk management focus
• Clarity, transparency, and honesty in communication
• Local national advancement

Step Six: Risk Management and Quality Control

Major infrastructure projects in heavy industrial applications in emerging markets have a spotty record in the area of estimating initial capital cost and operational performances, even though the standard of feasibility studies has improved in the last decade.  Third-party reviews rarely have time and funds for the due diligence required.  This is where USP&E Consulting comes back in as an owner’s representative when other EPC firms are hired. Through our risk management, controls design, eTap simulations, and operations expertise, we can help prevent execution problems and keep risks in line.

Step Seven: Operations & Maintenance

USP&E Africa is an award winning, world-class operations and maintenance (O&M) company. With our Center of Excellence located in Lunsar, Sierra Leone, USP&E Africa is focused on driving value by reducing fuel consumption in the harshest environments on Earth.  

Our expertise covers all aspects of the power generation spectrum. USP&E successfully integrates equipment and subsystems manufactured by others into operational power generating stations.  We deliver excellence, strive for continuous improvement, and respond vigorously to change.  USP&E is 100 percent committed to serving our clients. Our areas of expertise and the professional services we offer are shown below.  Our experience is vast and comprehensive.  

Summary

• Our vision is to be the most trust supplier of energy services in emerging markets for major projects in the mining, oil and gas, hospitality, manufacturing, telecommunications, and other industries.
• Founded in 2002, USP&E has successfully completed over 150 project assignments in 22 countries.
• Extensive and varied background in power station projects
  • Project consulting
  • Project management
  • DFS
  • FEED
  • EPC
  • O&M

Email our CEO, Will Gruver, at will@uspeglobal.com to arrange a time to discuss your upcoming project and learn how USP&E can help you to drive value to FID and beyond.

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* Please Note that a feasibility study is guided by a set of assumptions, a strategy, development conditions and a planned outcome. The outcome is uncertain and targets and objectives may not be achievable. Furthermore, there can be no assurance that such study recommendations or forward-looking information will prove to be accurate, and actual results and future events could differ materially from those anticipated. Important factors that could cause actual results to differ materially include: fluctuations in commodity prices and currency exchange rates; the need for co-operation of government agencies in the issuance of required permits and approvals; the possibility of delay in development work or in construction, and uncertainty of meeting anticipated milestones; and other risks and uncertainties.

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