Project Finance Modeling

City Training UK
Course summary
Professional Training
3.5 hours
500 GBP excl. VAT
Full time
Online courses

Course description

This training will provide participants with the skills and techniques necessary to understand, analyse and model a project finance project. The session includes a detailed project financial model including construction and operational phases and related financing.

By the end of this course, participants will be able to:

  • Understand the key participants and strategic objectives of project finance;
  • Develop good project finance model structure and design;
  • Master the steps to take to build up the model;
  • Develop the key construction and operational assumptions;
  • Understand the financing structure, key debt covenants and required equity returns.

Suitability - Who should attend?

Infrastructure private equity, bankers, credit professionals, project finance investors and other professionals involved in large-scale projects

Training Course Content

Introduction to Project Finance

  • Long-term infrastructure, industrial projects and public services
  • Non-recourse or limited recourse structure (Special Purpose Vehicles)
  • Public-Private Partnership (PPP)
  • Key parties involved: promoter, constructor, off-taker, debt finance, equity sponsor, etc.
  • Debt ratios (Debt Service Coverage Ratio, Fixed Charge Cover, etc.)
  • Sponsor return criteria (unlevered and levered Internal Rate of Return, payback period, etc)

Role of Project Finance Model

  • Calculate viability of sponsor return and debt coverage ratios
  • Review of key construction assumptions
  • Discussion of operational assumptions
  • nReview of main financial assumptions and debt waterfall

Overall Model Assumptions

      • Real growth and inflation: revenues, capex and expenses
      • Construction phase, operation phase with use of flag periods

Modelling Construction Phase

  • Project cost and construction period
  • Capex build-up: maintenance and expansion
  • GAAP straight-line depreciation and tax based on double-declining balance
  • Operational working capital build-up prior to operational phase
  • Pre-operational capitalised costs
  • Debt capitalised interests
  • Project delay: how could we design the model to accommodate delays?

Modelling Operation Phase - Revenues

  • Sources of revenue: volume and price
  • Capacity build-up during operational phase
  • Monthly seasonality to be build-up
  • Escalating revenues: pitfalls in escalation factors

Modelling Operational Phase - Expenses

  • Variable costs: labor and energy costs
  • Fixed costs: management and head office, sales and marketing
  • Escalating expenses; real and nominal growth

Modelling Taxes

  • Effective tax rate based on taxable profits build-up
  • Net operating losses and deferred tax assets until full revenue capacity
  • Deferred tax liabilities as difference between book and tax depreciation

Modelling Capital Structures

  • Sources and uses of funding during construction phase
  • Equity financing by project sponsor/infrastructure funds/sovereign wealth funds
  • Revolving credit facility to finance Operating Working Capital during construction
  • Fees on the deal: interest, commitment fees on undrawn amount,
  • PIK interest during construction
  • Mapping out a capital structure during the operational phase
    • Mix of bank debt and bonds
    • Base rate and spread
    • Amortising tranche and cash sweep
  • Estimating and optimising debt capacity
  • Modelling of Revolving Credit Facility (RCF)
  • Linking to other statements and cash flow available for debt service (CADS)
  • Key ratios/debt covenants: Debt Service Coverage Ratio (DSCR), Loan Life Coverage Ratio (LLCR), etc

Project Appraisal

  • Investment appraisal crash course
  • How is DCF calculated in a project model?
  • Why do we discount?
  • How is the discount rate determined?
  • How is NPV calculated?
  • Project/unlevered and equity/levered Internal Rate of Return (IRR)
  • Sensitize IRR and money multiple to obain desired returns based on key drivers, phasing up front capex within the model


  • Stress-test the model
  • Develop scenarios
  • Participants to compute various changes based on revised operational and financial data

Why choose City Training UK

100% specialised on Corporate Finance with more than 20 different topics

Hundreds of participants trained from heads of departments to recent graduates

10 specialised trainers at minimum VP-level in leading financial institutions

About provider

City Training UK

City Training is a highly-distinguished supplier of premium public courses, in-house training, and courses for universities and schools. The company focuses solely on financial training and covers the areas of financial accounting, corporate finance, valuation, credit analysis, regulatory capital, mergers and...

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Contact info

City Training UK

100 Pall Mall, Saint James
SW1Y 5NQ London

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Average rating 5

Based on 1 reviews.

The couse was well organised and the trainer well prepared. We went through all the steps of a project finance model which I found very useful
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