One of the defining features of a project finance model is the debt optimisation functionality. Unlike corporate debt, where lenders can rely on a track record of earnings from ongoing operations, project finance is often used to fund the construction of large scale infrastructure projects in highly leveraged special purpose vehicles (SPVs). There are no historical results to base forecasts on and the debt size is based entirely on the cash flows projected by the model.
Watch to hear from expert financial modeller, Marli van Staden-Basson, as she walks us through the commercial and technical aspects of this optimisation functionality.
We cover:
- The cash flow profile of a typical greenfield project finance transaction
- Cash flow Available for Debt Service (CFADS) and the Cash Flow Waterfall
- The three key parameters defining the debt size: maximum leverage, minimum DSCR and tenor
Whether you are new to project finance modelling or looking to sharpen your understanding of the optimisation logic, this session will give you a clear, structured framework to work from.
