Financial Modelling for Renewables

Financial Modelling for Renewables is an online training course that examines all areas of project finance modelling for renewable energy projects. Delegates will learn the necessary tools for successful modelling and, through practical exercises, apply these techniques to realistic examples. The course is intended to provide delegates with a modelling toolbox allowing them to produce renewables models which can be developed seamlessly from feasibility stage through to financial close.

Who should attend: Institutional investors, investment managers, private equity, venture capitalists, banks, hedge funds.

Schedule: The course takes place on the following alternate days over three weeks comprising two hours teaching on each day from 9.00am to 11.00am (UK time).

Monday 4 October
Wednesday 6 October
Friday 8 October
Monday 11 October
Wednesday 13 October
Friday 15 October
Monday 18 October
Wednesday 20 October
Friday 22 October

The course also includes course material, online interaction and Q&A with the trainer.

Please note: The course is recorded so any sessions that cannot be attended can be taken at a later time.


Introduction

What are the special features of renewables cashflow modelling vs ‘classic’ project
finance?

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?

Inflation

  • Why model inflation?
  • How do we model inflation?
  • review illustrative indexation calculations

Data

  • Getting information into the model simply and safely
  • review illustrative data sections

Construction Costs

  • 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

Funding Calculations

  • 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

Balance Sheet

  • 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

Cash Balances

  • 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

Summary Sheets

  • 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.