Project Finance Modelling - A Practical Workshop

Course Overview:

The purpose of the course is for participants to learn how to build a project finance model using best practice principles. This will include the development of financial statements and the mastering of the main Excel techniques (such as forecasting, risk issues, differing scenarios and optimisation).

They will learn how to deal with more problematic modelling issues and gain hands-on experience of applying these skills.

Each participant will be required to bring a laptop running Microsoft Office with CD-Rom to the seminar.

Course Content:

Day One

Overview of the course and model case

• Common modelling errors
• Systematic Design Method
• Model design and structure – key steps
• Model layout and design
• Required sheets
• Key Excel features and techniques

Practical: producing a model framework using best practice

Production Forecast

• Production sales and volume
• Input prices and gross costs

Practical: completing operating statements

Fixed Assets

• Depreciation of fixed assets
• Schedules and workings

Practical: CAPEX and depreciation schedules

Project Financing and Cash

• Financing and loans
• Loan drawdown
• Rate, terms and repayment
• Debt amortisation schedules

Practical: Loans schedule with balance sheet and income statement inputs

Day Two

Income Statement and Balance Sheet

• Adding income and balance sheet
• Model checks on consistency
• Dealing with any circular references

Practical: completing and checking the initial statements

Cash Flow and Ratios

• International cash flow
• Cash flow to equity and debt providers (CFADS)
• Loan life / project life ratio
• Annual debt service ratio
• Interest cover

DCF and Initial Value

• Discount rate
• Methods of adding terminal value
• Producing an equity valuation

Practical: adding equity valuation to the template

Risk and Sensitivity

• Adding risk techniques
• What-if analysis
• Dynamic changes

Practical: Adding sensitivity and scenarios

A two-day hands-on workshop for developing constructing an advanced risk-based financial model.