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Project Finance Modelling for Renewable Energy

Learn the underlying financial and economic issues in renewable energy whilst working through individual project finance model equations

Modelling for Mergers & Acquisitions Masterclass

A two-day course presented in two full-day live webinars

  • Understanding the theory and practise of project finance transactions whilst building a model
  • This course is not a bureaucratic course that works through arbitrary rules derived by consulting companies and results in unnecessarily large and cumbersome models
  • Focus on complex model equations for seasonality, probabilistic resource analysis, merchant prices, debt sizing and debt repayment
  • Practising detailed methods to deal with circular references, effective risk presentation and modelling upside from re-financing and asset sale
  • Learning how to build models that present risks to equity and debt investors with creative tools rather than one size fits all rules
  • Applying focused excel techniques with supplementary tools that improve the efficiency of the modelling process
  • Series of videos and resources for continuing work and reinforcement of ideas in the course

  • Learn the underlying financial and economic issues in renewable energy whilst working through individual project finance model equations
  • Understand the pros and cons of alternative model structures for inputs, timing, order of calculation sheets and presentation of project risks
  • Become comfortable with model equations through participant practise with focused input, timeline, operation, project cash flow, debt sizing, debt funding, debt repayment and re-financing sections of a model
  • Understanding the mechanics and presentation of models for purpose of contract structuring versus risk management
  • Include valuation theory and upside from financing including evaluation of development risk, project IRR versus equity IRR, quantification of changing risk and alterntive debt sculpting with different DSCR targets
  • Reflecting changes in renewable industry including storage, hydrogen and merchant price risk
  • Use Excel tools to highlight risk areas, particularly in sensitivity analysis

Day One: Working Through Inputs, Timelines, Operations and Construction Financing

Creative and Non-Bureaucratic Modelling

  • Model auditors and obvious things to do
  • Flexible time lines in different sheets
  • Tools and short-cuts for presentation and efficiency
  • Alternative methods for input sheets and structuring inputs to be consistent with calculations
  • Use of switches in input sheets
  • Illustration of common mistakes – unstructured models and over-structured models
  • Practical: Work on Timelines to Understand Model Flexibility, Transparency, Model Accuracy and Creative Presentation

Physical Operations in Model

  • Starting with operations or with construction
  • Building in yield, degradation, capacity factors, availability factors and seasonality
  • Setting Up Model for P90, P50 etc. with Standard Deviation
  • Using LOOKUP or XLOOKUP for Modelling Seasonality
  • Practical: Work through seasonality issues in monthly model and in semi-annual model using flags and a user-defined function

Free Cash Flow and Project IRR

  • Fundamental idea of finance to earn project IRR higher than pre-tax debt debt cost
  • Modelling development cost and project cost
  • Incorporating flexible S-Curves
  • Generally fixed, but some variable costs in operation and maintenance
  • Incorporating inflation in sensible manner with flags and switches
  • Modelling PPA price with different inflation options
  • Computing levelised cost of energy from generation and costs
  • Using goal seek and macro to derive PPA Price from Target Project IRR
  • Practical: Computing Selected Tricky Equations in Model For Inflation, S-Curves and Building a Goal Seek Macro

Project Financing During Construction for a Renewable Power Project

  • Setting-up a financing sheet for financing requirements during construction and cash flow waterfall after construction
  • Review of debt terms in renewable energy including debt sizing, sculpted repayments, credit spreads and funding
  • Funding during construction and circular references from interest and fees
  • Not being intimidated of impressed by copy and paste macros
  • Debt sizing from debt to capital versus cash flow
  • Debt service reserve accounts (DSRA) in project finance
  • Practical: Calculate Selected Equations and Understand Circular References with Resolution.

Day Two: Taxes, Repayment, Waterfall, Re-financing and Asset Sale Upside

Sculpting and Cash Flow Waterfall

  • Understanding models for debt structuring versus risk analysis
  • Calculation of CFADS with and without tax and understanding the general idea and importance of CFADS
  • Debt sizing from cash flow and DSCR targets and importance of sculpting mathematics rather than forcing model
  • Use of LLCR to compute sculpting with debt to capital constraint
  • Fixing debt repayment and debt size for risk analysis
  • Error checks for debt repayment
  • Incorporating flexible debt sizing methods and understanding the finance theory behind alternative sizing
  • Modelling cash flow waterfall to equity cash flow and computing equity IRR
  • Practical: Working through sculpting calculations with fixed debt and debt from cash flow.

Taxes and Circularity

  • Calculating depreciation without IDC and fees
  • Circular reference in taxes from interest and sculpting
  • Incorporating depreciation on fees and IDC
  • Using VDB function for flexible depreciation methods

Model Outputs and Adding Re-financing and Sale of Project

  • Mechanics of modelling typical project finance ratios:
    • Theory and calculation of Debt Service Cover Ratio (DSCR)
    • Theory and calculation of LLCR and PLCR
    • Equity IRR with and without development fees
    • Project IRR pre-tax and after-tax
  • Calculating the value of projects over time with and without changes in discount rates
  • Computing holding period returns with alternative sale assumptions
  • Understanding and computing upside from re-financing
  • Practical: create a plant sale analysis in the model

Presentation of Sensitivity Analysis and Scenario for a Renewable Energy Project

  • Use of model for risk analysis
  • Using sensitivity analysis with spinners and resets
  • Creation of scenario table with data table and macro
  • Understanding construction of scenario table
  • Exercise: Use scenario table for Tornado Diagram and Waterfall Diagram


The trainer is a world leader in financial modelling, project finance analysis and corporate valuation theory and practice. He has been a financial advisor for many project finance and M&A transactions around the globe and he has taught hundreds of courses on an assortment of financial modelling, financial analysis and energy analysis topics.

The trainer’s teaching involves directing professional development courses for finance and energy professionals in Africa, South America, Asia and Europe. His principal courses include the economics, financing and resource analysis of renewable energy, project finance modelling, corporate modelling and M&A valuation, energy storage analysis, analysis of contracts associated with independent power, electricity power economics and corporate valuation theory. He has taught customized courses for Goldman Sachs, EDF, MIT’s Sloan Business School, UBA Nigeria, Santander Bank, General Electric, CapitaLand, Tenaga Nasional, the Korea Banking Institute, Shell Oil, Engie, Society General, HSBC, Citibank, CIMB, Linklaters, Saudi Aramco, Saudi Fransi Bank and many other energy and industrial clients.

He has created a unique modelling framework to address complex project finance sculpting, difficulties with copy and paste solutions to circular references, and consistent model verification and as well as unique financial modelling methods that solve classic project finance issues. He has provided financial advisory services and developed the financial model for a 5,000 MW electricity project costing USD 28 billion.

The course will enable participants to understand project finance theory for renewable energy and to understand the unique tools to make efficient models.

Participants will build an entire financial model for a renewable power project to include:

  • Flexible revenue, production and cost forecasts
  • Flexible capital expenditure profiles
  • Advanced financing structures including debt sculpting
  • Model dividend distributions to equity shareholders and upside from asset sale
  • Bank ratios and debt covenants, and how to include them in the model
  • Debt service reserve accounts and re-financing options

This is a highly practical course that will put into practice what is learned during each module.

The trainer will provide solutions and feedback throughout the course.

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Per participant
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  • On a date, time and in a location of your choice
  • Topics expanded or deleted to your bespoke requirements

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  • Full course recording edited exclusively for your company
  • Files converted to enable housing on your LMS

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