Project Finance

I believe this site includes a lot of unique ways to address advanced project finance issues from a modelling perspective, from a theoretical perspective and from an analysis perspective.  Financial modelling techniques allow you to address sculpting, DSRA, financing, re-financing, presentation, model structuring and a host of complex issues that arise in project finance modelling. Many, but not all, deal with the painful issue of circular references.  I addition, if you are new to project finance you can go to the A-Z page and watch some long videos that walk you thorough the process.  If you are advanced you can look at the advanced theory page.

Because some of the pages may be tricky to find with the menus, I have included the links to various subjects that I think are more advanced than the basic building of a model. I have included a model that contains many of the issue below. The workbook attached to the button has many of the subjects discussed below.

Excel File with Comprehensive Project Finance Exercises and Model Mechanics from Basic to Advanced

1.       I consider the following subjects fairly advanced, if you want find any of these subjects are interesting to you.   

a.       Structuring a project with evaluation of debt size from either P90, P50, or maximum debt to capital.

b.       Inclusion of DSRA changes in the DSCR for debt sculpting.

DSRA Cash Flow Movement and Sculpting

c.       Resolving circular references without copy and paste macros or the iteration button.

Implementing the Parallel Model

d.       Effective control pages where you can evaluate changes to inputs and properly include the inputs in relevant input sheets.

Control Pages and Scenarios

e.       Debt sculpting of multiple debt issues where cash flow is affected by interest expenses and income taxes.

Multiple Sculpted Issues

f.        Computing debt repayment where the debt size is given, and sculpting is used to obtain a minimum DSCR with varying DSCR’s.

g.       Modelling development fees in the context of multiple investors.

Development Cost Analysis

h.       Creating data tables using VBA to resolve problems with data tables

Data Tables & Goal Seek

i.         Developing timelines that can easily convert monthly to semi-annual or quarterly and creating semi-annual sums in monthly models without SUM(OFFSET).

Heavy Financial Models

j.         Incorporating options for DSRA funding with an L/C or with cash funding.

Sculpting and Debt Fees (Including Fees for DSRA L/C)

k.       Adding re-financing assumptions to a model where the debt size depends on taxes which are also affected by interest on the re-financing.

l.         Including actual data in models for the construction period and operating period.

Incorporating Actuals in Project Finance

m.     Developing alternative ways to model working capital requirements in the initial operating periods of a project.

Working Capital in Project Finance

n.       Evaluating different structures for equity investors including cash flow flips and incentives to developers.

Performance Incentives for Developers

o.       Modelling the effect of financing in different currencies including translation adjustments on the balance sheet.

p.       Modelling alternative cash sweep structures.

Cash Sweep and Risk versus Return

q.       Modelling mini-perms and different re-financing assumptions.

r.        Modelling equity bridge loans and the associated circular references along with options to include or not include interest during construction in the borrowing base.

IRR with Changing Discount Rates and Assumed Sale

s.        Valuation of projects with changing buyer target IRR’s and computation of holding period returns.

t.        Evaluation of NOL time limits on the calculation of income tax.

Expiration of NOL in Project Finance

u.       Accumulation of projects into a portfolio

v.       Evaluation of defaults and the risks of senior and subordinated debt

w.       Computation of the LLCR with different debt issues using the prospective debt IRR

Featured Project Finance and Real Estate Model Collection

Solar Project Finance Models

On-Shore and Off-Shore Wind Project Finance Models

Project Finance Models of Thermal Electricity Power Plants

Hydro Project Finance Models

Toll Road Project Finance

Sea Port Models

Hotel Project Finance

Commercial Real Estate and Lease Roll

Residential Real Estate Modelling

Mixed Development and Investment Portfolios of Projects

Collateral Debt Obligations and Other Modelling in Real Estate

Mining Models

Agriculture Project Finance

Upstream Oil Project Finance Models

Yield Based Flip and Partnership Allocation (Generally for Wind Projects)

Tax Equity Structures in U.S. – DRO’s, Stop Loss, Outside Capital Account …

Manufacturing Project Finance

Project Finance Credit Analysis Examples

Project Finance On Line Course

Project Finance Theory and Marriage Contracts

A-Z Project Finance Modelling

Original (More Basic) Project Finance A-Z On-Line Course

Sculpting Fundamentals and Non-Constant Interest Rates

Repayments with Debt to Capital Constraint and Constant DSCR

Incorporating Taxes in Debt Sculpting and Simple UDF Functions

Sculpting and Debt Fees (Including Fees for DSRA L/C)

Interest Income on the DSRA and Sculpting

Learning What Not to do from Horrible Models

Circular References in Project Finance and Becoming a Top Modeller Instead of a Copy and Paster

Overview of Circular References and Hitting the Wall

Parallel Model Concept Introduction

The project finance resources are divided into five parts.

The first part contains selected project finance models that are complete, many of which include resolution of circular references.  For each of the section, I have tried to put an outrageous example from developing countries.  If you are interested in even more models, you can send me an e-mail at You can also click on the button below to make requests.

The second part contains free on-line lesson sets. A couple of the lesson walk through making a project finance model from A-Z.  Other of the lesson address complex and detailed issues in project finance structuring.  Many of these issues involve sculpting, DSRA and re-financing. The more complex courses show you how to become a top-modeller rather than a copy and paster. If you are interested in really learning how to become a top modeller, you can click on the button below.

The third project finance section addresses advanced debt and contract structuring issues. The debt structuring issues are divided into: (1) debt sizing; (2) debt funding during construction; (3) debt repayment; (4) interest rates and credit spreads; and (5) credit protections.  If you are interested in attending courses that address some of these more advanced issues, click on the button below.

The fourth project finance section explains in detail how to create UDF functions rather than using copy and paste macros to address circular reference problems.

The fifth section discusses how to update models for actual data after actual data arrives.

  • Featured Project Finance Models
  • A-Z Exercises to Build Project Finance Model
  • Advanced Project Finance Issues
  • Circular References in Project Finance Models
  • Dynamic Goal Seek and Other User Defined Functions in Project Finance Model