Leading Advisors in Project Finance

Financial Modelling
for Renewable Energy Projects4 days or 8 half-days

Develop a financial model that considers the strong seasonality of renewables projects and optimise the financing plan.

In this course, you will construct a project finance model from scratch and use it to perform a discounted cash flow analysis.

From the power generation capacity, you will build a revenue profile based on the agreed price, whether it be under a PPA, a subsidy scheme or simply the market price and consider the deterioration of equipment over time.

You will learn to model senior debt with a sculpted repayment profile to match a fixed cover ratio and ensure repayments follow the seasonality profile of your renewable project.

This course is designed to help you:

  • Develop and build flexible and robust financial models with a semi-annual timeline
  • Construct and use a cash cascade to service financial instruments and reserve accounts
  • Understand and use NPV, IRR and debt cover ratio techniques
  • Model debt with sculpted repayment profiles and cash sweeps
  • Understand the concept of power yields-based probabilities (P50, P90) as part of scenario management
  • Perform sensitivity and scenario analysis
  • Simplify formulas using logical masks, switches, and counters
  • Adopt a quality control approach throughout the model development process

For convenience, the course can be delivered in two parts, and we can offer the first part as a standalone course in its own right.

  • Part 1: Methodology & Techniques

    You will learn a number of fundamental techniques and concepts by developing your own project finance model, using it to assess the feasibility of a project. You will explore both the investment and financing decisions based on an optimised financing plan and the debt cover ratios and other returns.

    By the end of part 1, you will have constructed a model allowing you to perform a discounted cash flow analysis and explore relevant sensitivities.

  • Part 2: Extended Techniques

    You will further develop the model constructed in part 1 and delve into a range of sophisticated financial modelling techniques for developing a plan for financing a project.

    You will develop several increasingly complex features associated with debt modelling, including grace periods, the cash cascade, debt sculpting, the cash sweep, and the debt service reserve account (DSRA). You will also explore techniques for handling and managing circularities, as well as the concepts and applications of the various debt cover ratios.

  • Date Course Format Time Zone Price Register interest
    12-15 April 2021 Solar
    (Part 1)
    Online GMT £1200
    12-15 April 2021
    19-22 April 2021
    (Parts 1&2)
    Online GMT £2400
    17-20 May 2021 Wind
    (Part 1)
    Online GMT £1200
    17-20 May 2021
    24-27 May 2021
    (Parts 1&2)
    Online GMT £2400
    VAT of 20% is required to be levied for training courses conducted in the United Kingdom. Training courses conducted outside the UK may include local sales taxes, where applicable. The fees below are quoted net of any taxes.

In-house Courses

Where there is a demand for multiple delegates from the same firm, it may be better to run an in-house course. This is a cost-effective method of training participants from the one company, conducted on your chosen date, either at your premises or ours, for up to eight delegates.

    Selected course:

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    Course Details

    Full course program
    • Part 1: Methodology & Techniques
      • Model design and construction
        • The top down approach
        • The Principle of Error Reduction
      • Techniques for quick and efficient modelling
        • Keyboard shortcuts
      • Using range names
        • Pros and cons
      • The inflation index
      • The cash flow drivers
        • Production and revenue
        • Variable and fixed cost
        • Working capital
      • Profits and Retained earnings
      • The cash flow and net cash
      • Cash and overdraft (cash shortfall)
      • Capital expenditure and depreciation
      • Financing and capital structure
      • Interest and dividends
      • Tax losses and the tax calculation
      • Sensitivities and data tables
      • Graphs
      • Investment decision: base case vs expansion case
      • Conclusion and review
    • Part 2: Extended Techniques
      • Introduction and revision
        • Case study outline and model
      • Calculating interest
        • The calculation of interest
        • Interest on unpaid interest
      • Peak exposure
        • INDEX and MATCH functions
      • Subordinated debt
        • Deferring interest
        • Deferring repayments
        • Interest on unpaid interest
      • The cash cascade
        • Sources and uses of funds
      • Ratios
        • Annual debt service cover ratio
        • Loan life cover ratio
        • Project life cover ratio
      • Debt service reserve account
        • Future debt service obligations
        • Movements to and from the DSRA
      • Senior debt
        • Calculating debt requirements
        • Repayment holiday
        • Repayment period mask
      • Cash sweep
        • The circular problem
        • Recognising future cash flows
      • Debt sculpting
        • Restructuring the debt

    Jack Clarke+44 207 562 0477

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