Project Finance Modelling Workshop

Agenda Program
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Prague, NH Hotel Prague
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Best Practices in Project Finance Modelling
Model Design and Structure
Modelling of Production Forecast
Analysing the Key Operating Assumptions
Fixed Assets, CAPEX and Depreciation Schedules
Analysing Debt Capacity and Debt Servicing Ratios
International Cash Flow Statement and Ratios
DCF, Project Returns and Risk
Contractual Issues and Arrangements
Workshop Objectives
The purpose of the workshop 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. By building a complete model, participants will gain the confidence to build and revise their own models.

Key Points
Many models fail due to inadequate structures and methodology and this workshop offers the opportunity to build a comprehensive financial model using international best-practice principles. The workshop commences with a discussion of objectives and common mistakes and then develops the case model in stages. On completion, participants will have built a complete model for future use and review.

Who should attend?
  • Project finance executives
  • CFOs
  • Financial controllers and managers
  • Financial and business analysts
  • Project risk managers
The workshop is taught using demonstrations combined with practical and interactive case studies. The exercises in each session reinforce the concepts covered in each of the units. Emphasis is placed on delegates gaining practical, hands-on experience of the design and construction of financial models in Excel. Comprehensive product notes and modelling software are provided for future reference.

Participants will receive printouts of all slides and the Excel spreadsheets used during the workshop plus a selection of templates and add-ins.
The course will be highly practical and hands-on. Participants are required to bring a notebook with MS Excel. Participants will use models and exercises to outline and develop the techniques and methods.
Microsoft®, Excel® and Windows® are registered trade marks of MICROSOFT Corporation.

Program of the seminar: Project Finance Modelling Workshop

The seminar timetable follows Central European Time (CET).

09.00 - 09.15 Welcome and Introduction

09.15 - 12.00

Overview of the Workshop and Project Model Case

  • Presentation of workshop case and review of theory
  • Offtake agreements, completion undertakings and security issues
  • Model objectives - viability, debt capacity, returns (NPV, IRR etc.), sensitivities
  • Setting model targets for debt cover and project returns
  • Review of an existing model to highlight common modelling errors
  • Systematic Design Method
  • Model design and structure - key steps
  • Model layout and design
  • Required sheets and modules
  • Key Excel features and techniques

Practical: producing a model framework using best practice

Production Forecast

  • Useful modelling techniques
  • Dealing with multiple currencies
  • Comparison of nominal versus real figures
  • Modelling production sales and volume
  • Input prices and gross costs

Practical: completing operating statements

12.00 - 13.00 Lunch

13.00 - 17.00

Fixed Assets

  • Construction and interest during construction
  • Accounting depreciation of fixed assets
  • Developing schedules and workings

Practical: CAPEX and depreciation schedules

Project Financing and Cash

  • Review of sources and types of debt finance
  • Developing the project debt capacity
  • Adding financing and loans
  • Multiple rates, terms and repayment profiles
  • Varying debt amortisation schedules

Practical: Loans schedule with balance sheet and income statement inputs

09.00 - 09.15 Recap

09.15 - 12.00

Income Statement and Balance Sheet

  • Bringing together the workings for revenue, assets, debt and capital expenditure
  • Developing an income and balance sheet
  • Ensuring model checks on consistency
  • Methods of dealing with any circular references

Practical: completing and checking the initial statements

Cash Flow and Ratios

  • Deriving an international cash flow statement
  • Cash flow to equity and debt providers (CFADS)
  • Loan life / project life ratio
  • Annual debt service ratio
  • Cash extraction and dividend issues
  • Checking the project debt capacity and covenants

12.00 - 13.00 Lunch

13.00 - 17.00

DCF and Project Returns

  • Review of discounting theory
  • Developing a suitable project and equity discount rate
  • Methods of adding terminal value
  • Producing project and equity returns
  • Checking the returns against the project targets

Practical: adding equity valuation to the template

Risk and Sensitivity

  • Assessment of project risks
  • Suitable Excel risk techniques
  • Adding model sensitivities and what-if analysis
  • Dynamic changes and management reporting

Practical: Adding key sensitivity and scenarios

Evaluation and Termination of the Workshop

Training catalogue in PDF
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