ELECTRICAL PROJECT FINANCE MODELLING ANALYSIS
About The Course
This course will provide you with the ability to understand nuances of project finance theory through creating and understanding project finance models. While working through the construction of models in a hands-on environment, you will be better able to quantify risks of different types of projects and you will be able to use models to assist in the negotiation of contracts.
The course is designed so that you understand the importance of: (1) structuring models with transparent formulas and a sheet structure that makes sense; (2) debt sizing using alternative methods including sculpting; (3) developing the funding parts of the model before commercial operation and problems with circular references that arise from interest during construction fees and the debt service reserve account; (4) building flexible models with effective summary statistics. The course will show you how to construct that models are accurate with effective error checks that verify the model; so that your models can incorporate complex cash flow waterfalls, alternative funding cascades and sculpted repayment techniques; and so that your models will be transparent and clear to understand by users. Additionally, attendees learn how to use advanced techniques to resolve circular references associated with funding of a project and debt sculpting that use VBA functions rather than macros.
- Understand project finance models in the context of finance theory related to subtle issues associated with contract structuring, debt sizing, debt funding, debt repayment, debt servicing costs and credit enhancements.
- Interpret models developed by other people and add master scenario pages to any model using case studies of actual models.
- Create flexible models with effective summary statistics to evaluate alternative timing, operating assumptions, financial structures, re-financing and contract pricing.
- Work through the difficult problems in project finance modelling including
– Complex cash flow waterfalls with balloon payments and mini-perm structures
– Sizing of debt with capitalized interest and alternative drawdown schedules
– Flexible debt sculpting with income taxes
- Understand the benefits of creating user defined functions rather than copy and paste macros to resolve any circular reference problems in project finance models including funding problems and debt sculpting
- Learn Excel techniques with some VBA to make better presentations from models and to make models more transparent and efficient
Who Should Attend
This training course is ideal for professionals who wants a thorough grounding in project financing modelling. Professionals in corporate planning, economics, investment analyst, corporate/project finance, business development, infrastructure advisory and heads of business units will find this course useful.
As such, it represents a perfect learning experience for professionals within Utility Companies (Power, IPP, etc.), banks and finance companies, government ministries and departments, oil and energy companies, power equipment manufacturers, international finance institutions, multi-lateral and bi-lateral organizations providing services to the energy section.
You must have a practical familiarity of the following:
- The layout of Excel
- Have the ability to enter data in Excel
- Be able to use basic functions such as SUM, MIN, MAX, AVERAGE, etc.
- Have knowledge of the IF function
- Use relative and absolute references
Expert Course Faculty
Our key course expert provides financial and economic consulting services to a variety of clients, he teaches professional development courses in an assortment of modelling topics (project finance, M&A, and energy). He is passionate about teaching in Africa, South America, Asia and Europe. Many of the unique analytical concepts and modelling techniques he has developed have arisen from discussion with participants in his courses. He has taught customized courses for MIT’s Sloan Business School, Bank Paribas, Shell Oil, Society General, General Electric, HSBC, GDF Suez, Citibank, CIMB, Lind Lakers, Saudi Aramco and many other energy and industrial clients. His consulting activities include developing complex project finance, corporate and simulation models, providing expert testimony on financial and economic issues before energy regulatory agencies, and advisory services to support merger and acquisition projects.
Our key course expert has written a textbook titled Corporate and Project Finance Modelling, Theory and Practice published by Wiley Finance. The book introduces unique modelling techniques that address many complex issues that are not typically used by even the most experienced financial analysts. For example, it describes how to build user-defined functions to solve circular logic without cumbersome copy and paste macros; how to write function that derives the ratio of EV/EBITDA accounting for asset life, historical growth, taxes, return on investment, and cost of capital; and how to efficiently solve many project finance issues related to debt structuring. He is in the process of writing a second book that describes a series of valuation and analytical mistakes made in finance. This book uses many case studies from Harvard Business School that were thought to represent effective business strategies and later turned into valuation nightmares.
Over the course of his career our key course expert has been involved in formulating significant government policy related to electricity deregulation; he has prepared models and analyses for many clients around the world; he has evaluated energy purchasing decisions for many corporations; and, he has provided advice on corporate strategy. His projects include development of a biomass plant, analysis and advisory work for purchase of electricity generation, distribution and transmission assets by the City of Chicago, formulation of rate policy for major metro systems and street lighting networks, advocacy testimony on behalf of low income consumers, risk analysis for toll roads, and evaluation of solar and wind projects. He has constructed many advisory analyses for project finance and merger and acquisition transactions.
Lastly, our key course expert was formerly Vice President at the First National Bank of Chicago where he directed analysis of energy loans and also created financial modelling techniques used in advisory projects. He received an MBA specializing in econometrics (with honours) from the University of Chicago and a BSc in Finance from the University of Illinois (with highest university honours).
TOPICS THAT WILL BE COVERED
Model Structure and Alternative Excel Techniques
Debt Sculpting and Sizing from Cash Flow and Introduction to Circular References
Funding Analysis Before COD and Debt Accounts
Cash Flow Waterfall Post COD, Income Taxes and Credit Protections
This training course has a limited attendance for up to 20 participants only. Sessions commence at 9am on all days, with short intervals at 10.30am and 3.30pm respectively.
Refreshments will be provided in the short intervals. Lunch will be provided at 12:30pm for 1 hour. Sessions will end at 5pm on all days.
Unique Features with powerEDGE Training
- Pre-Course Questionnaire (PCQ) to help us focus on your learning objectives
- Detailed course & reference manual for continuous learning and sharing
- Practical exercises & case examples to better understand the principles
- Limited class size to ensure one-to-one interactivity
- Assessment at the end of the course to help you develop a personal action plan