While the effects of COVID-19 on the world are being examined, renewable projects still advance towards critical deadlines. Project supply chains, which rely upon global connections, are being affected by uncertainty as the virus moves globally. Project delays, without the added strain of coronavirus, can already be in the hundreds of thousands of dollars.
Beyond ensuring that your team is protected, proactive steps should be taken to protect your pipeline and your project timelines. To avoid the potential for significant delays and cost overruns, we highly recommend the following actions:
Prioritize all federal agency curative work as the highest importance to eliminate delays. We already see impacts from Federal agencies on our curable work as timing for review and approval of subordinations has grown from 5 months to 12 months+.
Act now to mitigate all manageable delays to eliminate lender issues. Lenders are taking a cautionary view of exposure for materials delivery and the potential inability of projects to meet critical PPA and tax credit deadlines.
Consider carefully how you negotiate contractual scheduling and timing risk. Overseas deliveries may resume. However, US EPC/construction timelines, already constrained due to tax deadlines and timetables, may now be at risk as quarantines are imposed at state and local levels. This can result in increased costs, scheduling challenges for materials delivered to sites, causing schedule safeguards to evaporate.
How is TerraPro prepared? To ensure the safety of our team and continuity for our clients and their projects, we have directed our San Diego HQ team to work remotely. Additionally, TerraPro has the strategic advantage of a fantastic team located throughout the US. TerraPro has built a team based upon expertise rather than location. Our systems and processes have withstood the test of many real-world challenges, to help our clients mitigate risk, manage the unexpected, and successfully complete their projects.
The TerraPro team is here to support you in ensuring your projects continue to move forward. Please let me know what concerns you have about your projects. Together, we can develop a plan to mitigate your pipeline risk and allow you, your team, and your company to take steps to secure a successful 2020 and beyond.