When timing uncertainty quietly turns protection into liquidity stress
Sector: Project Finance – Renewable Infrastructure
Asset Class: Infrastructure / Energy / Transport
Situation Type: Construction-phase FX & liquidity risk
Primary Issue: Timing-driven FX hedges destabilising build-phase cashflows
The Situation
Utility-scale renewable projects often hedge offshore capex at financial close using fixed-date FX forwards.
When construction timelines shift – as they inevitably do – those hedges stop behaving like protection and start competing with construction for liquidity.
The project remains operationally sound. The structure does not.
Why This Scenario is Common
This failure mode appears repeatedly because:
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Construction timing uncertainty is underestimated at financial close
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FX hedges are designed around calendars, not milestones
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Collateral behaviour is not stress-tested against delivery slippage
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Treasury execution risk is mistaken for “normal friction”
The structure assumes certainty where none exists.
Why It Matters
Construction-phase FX risk rarely shows up as headline loss.
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Unexpected collateral calls
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Early reserve usage
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FX variance that doesn’t line up with capex delivery
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Governance friction under lender scrutiny
By the time it’s visible, liquidity is already under pressure.
How This Is Typically Addressed (Incorrectly)
These situations are not solved by “better execution”.
They require a structural redesign of the FX overlay to:
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Align hedge activation with delivery reality
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Bound collateral volatility during construction
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Restore liquidity priority to the build programme
These responses destroy value and reduce control.
Primary Engagement Route
Hedge Rebuild™ – construction-phase FX and liquidity redesign
Read the IC Brief → (2-page decision summary)
Full structural narrative shared selectively on request.
Illustrative scenario for discussion purposes only. Not a transaction summary or client-specific case study.