Airports, toll roads, power plants are all examples of incredibly complex endeavors, both logistically and from a financial analysis perspective. Project finance requires specialized skills and techniques, such as modeling pre-completion costs and financing, debt facilities, sculpted debt schedules, and unique tax issues. This three-day course covers the theory and implementation of analyzing a project finance deal through the lens of a toll road example.

##### Introduction to Project Finance Modeling

I. What is Financial Modeling?

II. Why Professionals Build Models

III. Which Models to Implement

IV. Basic Model Layout & Design

*Exercise: Working with a Bad Model*

##### Building a ToolKit

I. Time Value of Money Functions

II. Mathematical/Statistical Functions

III. Logical Functions

IV. Lookup Functions

V. Naming Ranges / Data Validation Lists

VI. Function Combinations

*Exercise: Time Value of Money Functions*

*Exercise: Mathematical/Statistical Functions*

*Exercise: Logical functions*

*Exercise: Lookup Functions*

*Exercise: Naming Ranges / Data Validation Lists*

##### Scenario Selectors: The first Step in a Model

I. Overview of a Scenario Selector

II. Specific Scenario Selector Setup & Use

*Exercise: Scenario Selectors*

##### Dates and Timing: The Framework for a Model

I. Overview of Dates and Timing Set Up

II. Specific Date and Timing Functions and Organization

*Exercise: Dates & Timing*

##### Core Concepts: Constructions Phase Details

I. Financing Construction: Debt and Equity

*Exercise: Calculating Construction Financing, Including Interest During Construction*

##### Core Concepts: Capex and Depreciation

I. Capital Expenditures: Setting up a schedule for CAPEX

*Exercise: CAPEX Schedules*

II. Depreciation Calculations

*Exercise: Depreciation Functions & Methodology*

III. Book Depreciation vs. Tax Depreciation

##### Core Concepts: Project Revenue and Cost

I. A Bottom-Up Approach

II. Flexible Approach to Project Finance Scenarios

*Exercise: Calculating Revenue and Cost for a Toll Road*

##### Core Concepts: Current and Long-Term Liabilities

I. Basic Fixed Rate Amortization

*Exercise: Amortizing a Fixed Rate Loan*

II. Floating Rate Amortization

*Exercise: Amortizing a Floating Rate Loan*

III. Revolving Credit Facilities

*Exercise: Setting Up All Aspects of a Revolving Credit Facility*

IV. Creating Sculpted Debt Amortization

*Exercise: Sculpting Debt Using a DSCR*

##### Core Concepts: Reserve Accounts

I. Theory and Types of Reserve Accounts

II. Example Calculation

*Exercise: Setting Up a Reserve Account in a Model*

##### Core Concepts: Triggers

I. Theory and Types of Triggers

II. Example Calculation and Cash Flow Adjustments

*Exercise: Setting Up a Triggers and Their Breach Repercussions in a Model*

##### Core Concepts: Tax

I. The Effects of Differences in Depreciation

##### Internal Rate of Return and Discounted Cash Flow Valuation

I. Project Flows vs. Equity Flows

II. IRR and NPV Calculations

*Exercise: Calculating Project and Equity IRR/NPV*

III. The Cost of Equity, Cost of Capital, & WACC

*Exercise: Calculating the Correct Rates*

IV. Calibrating Other Discounts: Size, Liquidity, Sovereign, and Control Risk

V. Terminal Value: Various Methodologies & Calculations

*Exercise: The Differences & Sensitivity of Terminal Value Methods*

##### Model Integrity: Ensuring Everything is Correct

I. Building Checks into the Model to Make Sure Calculations are Correct

II. Cash Checks

##### Output Reporting: Ensuring Everything is Understandable

I. Changing the Periodicity of Results

II. Building Snapshot Views

III. Relevant Metrics and Ratios

IV. Charting