STATUS
Reference Draft

VERSION
0.1

DATE
18 Sep 2026

How to use this glossary
The goal is not to turn every NFE discussion into finance jargon. These terms are included so engineering, product, commercial and finance discussions use the same definitions. Where NFE uses a term in a specific internal way, that is noted explicitly.

RPM

Reliable Power Microgrid

NFE's product model for providing reliable electricity as a service, with NFE owning/operating the enabling infrastructure during the service term and an optional later ownership path.

EaaS

Energy as a Service

A commercial model in which the customer buys an energy service (for NFE, metered electricity and reliability) rather than buying the underlying solar, battery and inverter equipment.

C&I

Commercial and Industrial

Customer segment covering businesses and institutions such as offices, schools, hotels, clinics, supermarkets, churches and factories.

CAPEX

Capital Expenditure

Upfront investment in long-lived assets: batteries, inverters, PV modules, switchgear, cabling, controls, installation and commissioning.

OPEX

Operating Expenditure

Recurring costs of running the RPM after construction, such as monitoring, service visits, insurance, communications, billing/admin and some maintenance.

O&M

Operations and Maintenance

Activities needed to keep the system safe and performing: monitoring, inspections, cleaning where applicable, repairs, warranty administration and maintenance.

EPC

Engineering, Procurement and Construction

The party/scope responsible for final engineering, purchasing equipment, constructing/ installing the system and commissioning it.

BoS

Balance of System

All supporting equipment beyond the main PV modules/batteries/inverters: mounting, cabling, protection, switchgear, combiner boxes, earthing and related hardware.

PV

Photovoltaic

Solar-electric generation technology that converts sunlight directly to electricity.

BESS

Battery Energy Storage System

The complete battery system, including cells/modules and associated controls/safety systems. Often used interchangeably with “battery storage” at project level.

LFP

Lithium Iron Phosphate

Lithium-ion battery chemistry commonly used in stationary storage because of its cycle life, thermal characteristics and cost profile.

kW

kilowatt

A unit of power: the instantaneous rate at which electricity is being produced or consumed. Inverter size and maximum facility demand are power quantities.

kWh

kilowatt-hour

A unit of energy: one kilowatt used for one hour. Customer bills and battery energy capacity are expressed in kWh.

kWp

kilowatt-peak

The rated DC output capacity of a PV array under standard test conditions.

DoD

Depth of Discharge

The percentage of a battery's nominal capacity that is used before recharging. A 90% DoD on a 120 kWh battery implies up to roughly 108 kWh discharged before other conversion losses/reserves.

RTE

Round-Trip Efficiency

The ratio of energy recovered from storage to energy put into it. If 100 kWh charges a battery and 90 kWh is later delivered, RTE is 90%.

EMS

Energy Management System

Software/control layer that decides how grid, PV, batteries and other resources operate, and provides monitoring, alarms, data and dispatch logic. For NFE this is part of the Microgrid OS.

TOU

Time of Use

A tariff structure in which electricity prices differ by time period, such as peak, shoulder and off-peak. TOU pricing can make stored solar particularly valuable during expensive evening hours.

SLA

Service Level Agreement

Contractual definition of the service NFE promises, such as availability, supported critical load, response time or outage-coverage duration.

PPA

Power Purchase Agreement

A contract under which one party sells electricity to another under agreed pricing and terms. RPM is broader than a conventional PPA because reliability, storage and operations are central to the service.

SPV

Special Purpose Vehicle

A separate legal entity created to own one project or a portfolio of projects. An RPM SPV could hold the equipment, customer contracts, debt and project cash flows separately from NFE's general corporate balance sheet.

CFADS

Cash Flow Available for Debt Service

Cash generated by the project that is available to pay principal and interest after defined operating costs. In the current NFE screening model we conservatively calculate CFADS after routine O&M, NFE site overhead and lifecycle reserve contributions, but before debt service.

DSCR

Debt Service Coverage Ratio

CFADS divided by scheduled principal + interest for the same period. Example: UGX 24.5m CFADS / UGX 13.9m debt service = about 1.76x. Above 1.0x means modeled cash flow exceeds scheduled debt service; lenders normally require additional cushion.

DSRA

Debt Service Reserve Account

Cash reserve maintained to cover debt service if operating cash flow is temporarily insufficient. A 6-month DSRA holds roughly half a year of scheduled debt service.

IRR

Internal Rate of Return

The discount rate at which the net present value of an investment's projected cash flows equals zero. In plain English, it is a time-adjusted measure of the return generated by investing capital today and receiving future cash flows. Compare IRR with NFE/investor return requirements and the risks in the assumptions; it is not the same as annual profit margin.

Project IRR

Project / unlevered Internal Rate of Return

IRR calculated on the project's operating cash flows before debt financing. It answers: “Does the asset itself generate an adequate return regardless of how we finance it?”

Equity IRR

Equity Internal Rate of Return

IRR on the cash invested by NFE/equity investors after accounting for debt drawdown and debt service. Leverage can increase or decrease equity IRR depending on the cost and terms of debt relative to project returns.

NPV

Net Present Value

Today's value of future project cash flows after discounting them at a chosen required return. Positive NPV means the modeled project creates value above that required return; negative NPV means it does not.

ROI

Return on Investment

A simpler return metric comparing gain to amount invested. Unlike IRR, basic ROI does not inherently account for when cash flows occur.

WACC

Weighted Average Cost of Capital

The blended required return/cost of a project's debt and equity capital, weighted by how much of each is used. It is often used as a discount rate or hurdle reference.

LLCR

Loan Life Coverage Ratio

Present value of CFADS available during the remaining loan life divided by outstanding debt. It looks beyond a single year's DSCR to the debt coverage over the loan period.

PLCR

Project Life Coverage Ratio

Present value of CFADS over the remaining project life divided by outstanding debt. It includes cash flows after the loan matures and is therefore normally higher than LLCR.

LCOE

Levelized Cost of Energy

Lifetime cost of producing electricity divided by lifetime electricity produced, discounted over time. Useful for comparing generation technologies, but it does not by itself capture reliability value or the timing value of stored energy.

LCOS

Levelized Cost of Storage

Lifetime cost of operating storage divided by the energy delivered from storage, generally accounting for efficiency, degradation and replacement. It is a storage analogue to LCOE.

P50 / P90

Probability-based energy cases

P50 is the energy estimate expected to be exceeded roughly 50% of the time; P90 is a more conservative estimate expected to be exceeded roughly 90% of the time. Lenders often care about conservative production cases.

Utility-price anchor

NFE's customer price is tied to the applicable utility tariff or a defined utility-based index, rather than an equipment lease payment.

RPM margin per kWh

The value NFE creates inside the customer's energy price after accounting for the cost of grid/other energy and RPM operating provisions. It is not automatically an extra charge above the utility tariff.

Lifecycle reserve

Cash set aside over time to fund major replacements such as batteries and inverters. It prevents the model from looking profitable only because future replacement costs were ignored.

Minimum energy commitment

A contractual floor on energy purchases that can reduce lender volume risk. NFE may prefer not to use a hard minimum unless financing requires it, to preserve the “pay for what you use” proposition.

Take-or-pay

A stronger form of volume commitment under which a customer pays for a minimum contracted quantity even if it does not consume it. This can improve bankability but may conflict with the desired RPM customer experience.

Early termination payment

A payment due if a customer voluntarily exits before the contract ends, typically designed to cover outstanding debt, demobilization and a defined portion of unrecovered investment.

Tariff indexation

Rules that change the customer tariff over time based on a reference such as the applicable utility tariff, inflation or another agreed index.

Critical load

The subset of facility demand that must remain powered during an outage. Defining critical load can materially reduce battery/inverter size and project cost.

Bankability

The combination of predictable cash flows, enforceable contracts, acceptable risks, sufficient coverage, credible counterparties and technical/regulatory certainty that makes a lender willing to finance a project.

IRR

Is the project/equity return high enough for the risk and capital being committed?

DSCR

Does current project cash flow comfortably cover this period's debt payment?

CFADS

How much cash is actually available to service the debt after operating obligations?

CAPEX per site / per supported kW

How much capital must NFE deploy to deliver the promised reliability and what size portfolio can available capital support?

Practical rule
IRR is a return metric; DSCR is a debt-safety metric. A project can have an attractive IRR but still be difficult to finance if cash flows arrive too late or DSCR is weak in the debt years. Conversely, a project can have strong DSCR because it uses little debt while still offering a poor equity return.