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1 | Project Finance Template | ||||||||
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4 | NOTE: The file is optimised for Google Sheets. Get started by signing in and making a copy of this template via the File menu rather than downloading it. | ||||||||
5 | This template is a basic starting point for project finance modelling. Understanding bankability for projects is critical for many climate technologies. The purpose of this template is to gain a preliminary understanding of project finance in non-technical terms and play around with some simple numbers. | ||||||||
6 | Purpose | ||||||||
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9 | Our template is most useful for people with no experience/expertise in project finance. That is: evaluating projects with no history and a dependency on cash-flows. | ||||||||
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13 | 1. Inputs: Fill out all relevant data points in the 'Inputs' sheet. Standard values are provided as a reference. 2. Outputs: Analyse your key KPIs are check if metrics are in the right range. 2. Scenarios: Run different scenarios to understand senstivities (macros need to be enabled) and quantify risks/impact of changes. | ||||||||
14 | Instructions | ||||||||
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17 | Some tips | 1. Gain a high-level understanding of important terms (DSCR etc.) banks use to assess projects 2. Run extensive sensitivity analysis to test the bankability of your project under different scenarios. 3. Provide references and explanations whereever needed. Understand project/contract. | |||||||
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21 | Bankability Dimensions | Describtion | |||||||
22 | Overall idea | The project's objectives, location and scope are clearly defined. | |||||||
23 | Lenders will need to see that the project is de-risked (TRL 9) and generates enough cashflows to re-pay debt. | Political commitment | The local/ municipal authorities involved or concerned by the project have provided/ are willing to provide a written letter of support for the project. Tax incentives may increase attractiveness. | ||||||
24 | Climate Impact | The project demonstrates GHG emissions reduction contributing to the country’s Nationally Determined Contribution (NDC). | |||||||
25 | Bankability | Maturity | A pre-feasibility study has already been carried out at the project level, a feasibility study has already been carried out at the project level/component level,, the lifecycle costs of the project, including pre-feasibility studies and maintenance, have been quantified correctly, sources of funding were analysed. | ||||||
26 | Economic viability | The overall cost of the project and the expected benefits have been/ are being estimated. | |||||||
27 | Technical viability | Technical solutions are/ will be assessed against feasible alternatives and should be at TRL 9 (validated by third parties). | |||||||
28 | Financial viability | Solid track record, sufficient creditworthiness, have potential to generate savings that may attract private sector financing/ investments. | |||||||
29 | Cash Flows | Expected to have potential to generate sufficient cashflow/ savings to repay a loan and break-even. | |||||||
30 | Offtake | Agreements with customers are in place and de-risking the endeavour through a strong pipeline. | |||||||
31 | Stakeholders | Contractors, suppliers, O&M parties are in place and creditworthy. | |||||||
32 | Supply chain | A sourcing strategy is in place, offtake agreements derisk the project. | |||||||
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34 | Limitations | This template is not a full-fletched project finance model. t's not suitable for detailed and complex modelling. For the sake of simplicity, it doesn't follow all modelling best practices. | |||||||
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37 | Useful Resources | Resources: | |||||||
38 | Legend | Blue = Input | Moody's Project Finance Methodology: | https://ratings.moodys.com/api/rmc-documents/361401 | |||||
39 | Light = Dropdown | Dentons Project Risks | https://www.dentons.com/-/media/pdfs/guides-reports-and-whitepapers/dentons-global-project-finance-risk-english-v2.pdf | ||||||
40 | Dark = Iterated Input | Mazars Project Finance Resources: | https://financialmodelling.mazars.com/course-schedule/best-practice-project-finance-modelling/ | ||||||
41 | Red = Button | Project Finance in Renewable Energy: Sensitivity Analysis and Valuation | https://digibuo.uniovi.es/dspace/bitstream/handle/10651/60394/Krit%20Yodpradit_FMT.pdf?sequence=3 | ||||||
42 | CTVC Articles: | https://www.ctvc.co/project-finance-bankability/ | |||||||
43 | Dentons Guide to Project Finance | https://www.dentons.com/~/media/6a199894417f4877adea73a76caac1a5.ashx | |||||||
44 | Planet A does not take responsibility for any kind of errors, mistakes or other issues with this template. For questions or if you find bugs get back to florian@planet-a.com | ||||||||