By AGILE Consulting Engineers, Solar PV and Battery Energy Storage Systems (BESS) specialists.
Developers sometimes assume that once they have engaged an Owner’s Engineer, the lender’s due diligence requirement is effectively covered. It usually is not. The two roles look similar on paper, both involve independent technical people reviewing the same solar photovoltaic (PV) or battery energy storage system (BESS) plant, but they answer to different clients with different questions in mind, and conflating them tends to create gaps that surface at the worst possible time, mid financial close.
Table of Contents
- Who Each Role Represents
- The Owner’s Engineer Role
- The Lender’s Technical Advisor Role
- Where the Scopes Overlap
- Where the Scopes Genuinely Differ
- Why a Project Might Need Both
- Practical Implications for Project Teams
- What to Do Next
- FAQ
Who Each Role Represents
An Owner’s Engineer (OE) is engaged by, and represents the interests of, the project owner or developer. A Lender’s Technical Advisor (LTA), sometimes called an independent engineer in a financing context, is engaged to represent the interests of the financing parties, typically a bank, a project finance syndicate, or other institutional lenders. The LTA is often contractually appointed and paid by the developer as a condition of financing, but its reporting obligation and its duty of care run to the lender group, not to the developer.
That distinction in who each party ultimately answers to shapes everything else about how the two roles operate, even where their day-to-day activities look superficially similar.
The Owner’s Engineer Role
The OE’s brief is to protect and advance the owner’s technical and commercial interests across the project lifecycle, from feasibility through design, procurement, construction, commissioning and often into early operations. Because the OE works for the party that will actually own and operate the asset, their focus tends to be broader and more continuous than a lender-facing review. They are interested not just in whether the plant will be bankable, but in whether it will perform well, be maintainable, and deliver the returns assumed in the business case over its full working life.
In practice, this means the OE is typically the party dealing most directly with the engineer of record, the Engineering, Procurement and Construction (EPC) contractor, and equipment suppliers on technical matters, and is embedded in the project team in a way an LTA generally is not.
The Lender’s Technical Advisor Role
The LTA’s brief is narrower and more episodic. Their core job is to give the lender group an independent opinion on whether the project is technically sound enough to lend against, and then to monitor that opinion through construction and into early operations to confirm the basis on which the loan was advanced still holds. This typically concentrates around a small number of defined phases: due diligence ahead of financial close, periodic monitoring during construction against drawdown milestones, and technical input at completion testing to confirm the project has met the performance thresholds tied to the financing conditions.
An LTA’s report is written for a lender’s credit and risk committee, not for the project team’s day-to-day decision making. It tends to focus heavily on downside risk: what could cause the project to underperform, default on covenants, or fail to reach the completion tests that trigger a change in loan terms.
Where the Scopes Overlap
Both roles review broadly the same technical subject matter. Both typically assess the plant design against the applicable standards and the owner’s or lender’s technical requirements, review the EPC contract’s technical adequacy, monitor construction progress and quality, and assess commissioning results including Factory Acceptance Testing (FAT) and Site Acceptance Testing (SAT) outcomes. Both are, in principle, independent of the EPC contractor and equipment suppliers, which is precisely why lenders find an LTA’s opinion credible and why owners find an OE’s advice useful.
This overlap is real and it is also where confusion tends to creep in. Because the subject matter looks so similar, it is tempting to treat one report as a substitute for the other. That temptation is worth resisting.
Where the Scopes Genuinely Differ
The practical differences show up in a few consistent places. The OE is generally engaged earlier and stays involved longer, often from feasibility through operations, while the LTA’s engagement is typically triggered by the financing process and is more concentrated around due diligence, drawdown monitoring and completion testing. The OE has latitude to advise on value-adding technical decisions, such as design optimisation or procurement strategy, that go beyond what a lender needs to know. The LTA is focused on risk to the loan, including construction schedule risk, cost overrun risk, and whether completion tests will genuinely be met, and its reporting lines run to the lender’s credit process rather than the project team.
There is also a structural point worth understanding: even though the LTA’s fees are usually paid by the developer, the LTA’s duty of care is to the lender. That is a meaningfully different relationship to the one an owner has with its own OE, and it is why an owner cannot simply rely on the LTA’s findings as a substitute for their own independent technical oversight.
Why a Project Might Need Both
On a debt-financed utility-scale project, both roles are typically present and neither replaces the other. The OE is protecting the owner’s interest in a plant that performs well and delivers the returns the business case assumed. The LTA is protecting the lender’s interest in a plant that meets the conditions the loan was advanced against. A well-run project treats these as complementary inputs, with the OE’s continuous, owner-side technical oversight producing better documentation and a cleaner technical record, which in turn tends to make the LTA’s due diligence and monitoring process smoother.
Financing structures, lender requirements and the specific scope of an LTA’s mandate vary considerably by deal and by lender, so any project-specific expectations about what an LTA will or will not cover should be confirmed directly with the relevant financing parties rather than assumed from general industry practice.
Practical Implications for Project Teams
For a developer approaching financial close, the practical takeaway is not to treat OE and LTA engagement as sequential or interchangeable. Bringing an OE in early, well before a financing process starts, tends to produce a design and construction record that holds up better under an LTA’s scrutiny, because the underlying technical decisions were independently reviewed as they were made, not reconstructed after the fact. Teams that leave all independent technical review to the LTA process, engaged only once financing discussions are underway, often find that the LTA’s due diligence surfaces issues that an earlier-engaged OE would have caught and resolved months earlier.
What to Do Next
If a project is heading toward a financing process without an independent Owner’s Engineer already embedded, this is the point where getting that oversight in place can smooth the due diligence process rather than complicate it. We’ve helped project teams get their technical documentation and design record into a state that stands up well to lender scrutiny, and it is worth having that conversation before the financing process formally begins.
FAQ
Can the same firm act as both Owner’s Engineer and Lender’s Technical Advisor on the same project?
It is uncommon and generally avoided because of the inherent conflict between representing the owner’s interests and providing an independent opinion to the lender, though specific arrangements vary and should be confirmed with the relevant financing parties.
Who pays for the Lender’s Technical Advisor?
The LTA’s fees are typically paid by the developer as a condition of financing, but the LTA’s duty of care and reporting obligation run to the lender group, not to the developer.
Does hiring an Owner’s Engineer remove the need for a Lender’s Technical Advisor?
No, if a project is being debt financed the lender will typically still require its own independent technical advisor, since the OE’s duty of care runs to the owner rather than to the lender group.
When is a Lender’s Technical Advisor typically engaged?
Usually once a financing process is underway, covering due diligence ahead of financial close, periodic monitoring during construction against drawdown milestones, and technical input at completion testing.
Does an Owner’s Engineer’s work make the financing process easier?
A well-documented technical record from an OE engaged early tends to make an LTA’s due diligence and monitoring process smoother, though financing outcomes ultimately depend on the specific deal and lender requirements.
Is the Owner’s Engineer role only relevant for financed projects?
No, the OE role is relevant to any project regardless of financing structure, since it exists to protect the owner’s technical and commercial interests across design, construction and operations.
