Project Finance Modelling Workshop

Monday, May 20

09.00 - 09.15 Welcome and Introduction

09.15 - 12.00

Overview of the Workshop and Project Model Case

  • Presentation of workshop case and review of theory
  • Offtake agreements, completion undertakings and security issues
  • Model objectives - viability, debt capacity, returns (NPV, IRR etc.), sensitivities
  • Setting model targets for debt cover and project returns
  • Review of an existing model to highlight common modelling errors
  • Systematic Design Method
  • Model design and structure - key steps
  • Model layout and design
  • Required sheets and modules
  • Key Excel features and techniques

Practical: producing a model framework using best practice

Production Forecast

  • Useful modelling techniques
  • Dealing with multiple currencies
  • Comparison of nominal versus real figures
  • Modelling production sales and volume
  • Input prices and gross costs

Practical: completing operating statements

12.00 - 13.00 Lunch

13.00 - 17.00

Fixed Assets

  • Construction and interest during construction
  • Accounting depreciation of fixed assets
  • Developing schedules and workings

Practical: CAPEX and depreciation schedules

Project Financing and Cash

  • Review of sources and types of debt finance
  • Developing the project debt capacity
  • Adding financing and loans
  • Multiple rates, terms and repayment profiles
  • Varying debt amortisation schedules

Practical: Loans schedule with balance sheet and income statement inputs

Tuesday, May 21

09.00 - 09.15 Recap

09.15 - 12.00

Income Statement and Balance Sheet

  • Bringing together the workings for revenue, assets, debt and capital expenditure
  • Developing an income and balance sheet
  • Ensuring model checks on consistency
  • Methods of dealing with any circular references

Practical: completing and checking the initial statements

Cash Flow and Ratios

  • Deriving an international cash flow statement
  • Cash flow to equity and debt providers (CFADS)
  • Loan life / project life ratio
  • Annual debt service ratio
  • Cash extraction and dividend issues
  • Checking the project debt capacity and covenants

12.00 - 13.00 Lunch

13.00 - 17.00

DCF and Project Returns

  • Review of discounting theory
  • Developing a suitable project and equity discount rate
  • Methods of adding terminal value
  • Producing project and equity returns
  • Checking the returns against the project targets

Practical: adding equity valuation to the template

Risk and Sensitivity

  • Assessment of project risks
  • Suitable Excel risk techniques
  • Adding model sensitivities and what-if analysis
  • Dynamic changes and management reporting

Practical: Adding key sensitivity and scenarios

Evaluation and Termination of the Workshop

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