## Project Finance Analysis and Modeling

• 14+ hours of instruction
• 18 Demonstrations
• 30 Participant exercises

# Project Finance Analysis and Modeling

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 precompletion costs and financing, debt facilities, sculpted debt schedules, and unique tax issues. This immersive course covers the theory and implementation of analyzing a project finance deal through the lens of a toll road example. Participants learn how to adapt typical modeling skills for the nuances of project finance and infrastructure projects. Includes over 14 hours of instruction, 18 demonstrations, 30 exercises, and a fully operational project finance model.

## Course Outline

#### 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

#### SectionCore 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