What are the special features of renewables cashflow modelling vs ‘classic’ project
The Renewables Project Finance Model
- What is the function of the model?
- What are the key drivers of model structure and good practice?
- What are key characteristics of a good model?
Model Design & Structure
- How do we design our model to achieve the ideal outcome?
- How can model structure minimise the risk of spreadsheet error?
- Key principles and golden ’rules’
- Introduction to two illustrative project finance renewables models
- What sheets do we need and how do we organise them?
- How do we layout calculations within the sheets?
- Why model inflation?
- How do we model inflation?
- review illustrative indexation calculations
- Getting information into the model simply and safely
- review illustrative data sections
- Modelling long & short construction periods
- Modelling overlap of construction and operating period
- review illustrative capex sections
- Practical Exercise: Using model skeleton with basic data, work with course trainer to build construction cost calculations, controlling timings, applying inflation and using switches to control options
The Operations Section
- Calculating revenues, modelling PPAs & CFDs
- Modelling operating profiles and seasonality
- Review illustrative operations calculations
- The Cash Flow Summary – telling the story
- Start to finish, top to bottom, the story of the project
- Practical Exercise: Using the model from practical 1, work with the course trainer to complete the operations sheet & begin populating the net cashflow summary
Circularity in the Model
- Are there circular calculations in project finance?
- How should we handle them?
- The re‐calc macro
- Practical Exercise: Work with the course trainer to add a simple re‐calc macro to the model
- Modelling Equity & Debt
- Drawdowns; Interest; Repayment; Sculpting; cash Sweeps; DSRA
- Review illustrative funding calculations
- Practical Exercise: Work with course trainer to add a simple finance section to the model
Project Finance Cover Factors
- What are the key project finance cover factors
- How do we model them?
- What do they mean?
- Review of Illustrative Cover Factor Calculations
Tax and Profit & Loss Calculations in the model
- What are the basic elements of tax & P&L calculations in the model?
- How do we model tax without circularity?
- Review of illustrative tax and P&L calculations
- Making it balance
- Review of illustrative balance sheet calculations
Developing the Model
- Adding monthly funding calculations in a semi‐annual timeline
- Review of illustrative monthly and quarterly calculations
- Practical Exercise: Add monthly capex and funding calculations to the model
- Project cash account; debt service reserve account; major maintenance account
- Review of illustrative cash account calculations
Investor Returns, Valuation and Exit
- Metrics, NPV & Investor IRR ‐ maths, modelling, meaning
- Equity return waterfall
- Review of illustrative Investor return calculations
- How do we estimate project sale value?
- How do we model exit options?
- Review of illustrative project valuation calculations
- Practical Exercise: Add simple EBITDA & DCF valuation and investor return calculations to the model
- One page key inputs and results summary sheet
- Annual summaries
- Getting the model to tell you what it’s doing
- Review of illustrative summary sheets
Scenario and Sensitivity Analysis with the Model
- Why sensitivity analysis?
- Evaluating alternative base cases
- How do we reduce error and keep track of sensitivities?
- Review of illustrative sensitivity tables
- Practical Exercise: The delegates will add a sensitivity table to their models
Checking the Model
- Why do we need to check the model?
- Protocols for checking
Working with Other People’s Models
- Navigating, validating, amending & running models written by someone else
Storing Results and Recording Changes
- Keeping track of data changes
- Storing results and tracking model changes
- Practical Exercise: Delegates will add a ‘stored results’ library sheet to their models and work with the course director to record a simple macro to operate it.