Long-Term Financial model for Energy Project

Long- term Financial modeling have played a important role in energy projects and the entire world of businesses. A high-quality energy projects, financial modeling is essential to predict key performance indicators, attract long-term financing, and track project milestones.

Havelet Finance Limited have the administration of experienced professionals in project financing dispensation and financial modeling, lending, accounting, business law and engineering.

We participate actively in the implementation of investment projects of our clients around the world, providing a full range of services for large businesses. The projects we fund includes thermal power plants, wind farms, solar power plants, geothermal power plants, electrical substations and other projects. Contact US for more information.

Generating a Long Term Financial model for Energy Projects

The utmost and widely used tools in the planning of capital-intensive investment projects such as the construction of power plants and substations Financial analysis based on basic financial ratios. This analysis allows the project team to better understand the project’s financial environment and variables, as well as identify areas that require special attention in financial modeling.

The Standards and requirements for financial modeling are numerous and may vary significantly depending on the type of project, the scale of the investment, and even the legal framework of the host country.

Below are the general requirements suitable for financial model of the energy project:

Docility with the best custom of financial modeling: The application that meets high requirements in the context of safety, reliability and accuracy. The model should allow simple calculations of the optimistic and pessimistic scenarios, among other things.

suitable shape of the financial model: A high-quality model should be planned in such a way that it will be suitable for both customer’s employees that creates a working atmosphere, making the necessary changes.

Appropriate performance indicators: Such parameters should be adopted by model to demonstrate a profitability, liquidity, debt load and others required by a particular customer. It should also display a balance sheet, a project profit and loss statement, and a detailed cash flow statement.

Workable project financing structure. Calculation of funding flows and repayment of debts must be accurate and fully automated in order to avoid critical errors when further changing project parameters.

Since the financial model is the basis for the further development of the project and attracting funding, we recommend trusting the modeling to professionals. Our team will help you save time and get reliable and predictable results.

Advantages of the Financial Model of the energy Project

1. Accurate adherence to deadlines. Our team develops financial models for the largest companies in various industries, including power generation industry and heavy industry. We know exactly how long a project of a certain type and scale takes.

2. Ready and flexible solutions. Using our financial modeling services, the customer receives a completely turnkey solution. A flexible financial model can be easily adapted by your specialists based on entered information to calculate project sensitivity, tax burden, cash flows, risks and other parameters.

3. Customer support at all stages. We assist the customer’s project team in coordinating project documentation, testing models, negotiating with lenders, guarantees and other aspects related to the financing of an investment project.

Project finance in the construction of energy projects

Project finance is the funding (financing) of long-term infrastructure, industrial projects, and public services using a non-recourse or limited recourse financial structure. The debt and equity used to finance the project are paid back from the cash flow generated by the project. As a rule, these financial resources are divided into two groups.

The first group is associated with the resources of creditors (for example, long-term investment loans), and the second group is associated with the resources of owners and investors. The relatively high initial investment costs for the construction of power plants and electrical substations require the right choice of methods and sources of financing and the construction of the most realistic financial model, taking into account the expected income of the energy project in the future. Here it is necessary to take into account the type of connected power plant, the type of consumers, the expected level of consumption, location, goals and the scale of the project as a whole.

With the development of off balance sheet financing (project finance), energy companies have gained a much greater degree of freedom, being able to establish a special purpose vehicle for obtaining loans and shifting the risks to capital providers.

Long-term financing for energy projects actually converts high initial investment costs into periodic debt service payments or dividend payments to project shareholders. Most companies do not “like” debt very much, trying to keep the debt ratio close to zero. For such companies, in order to achieve strategic goals, it is more convenient to develop the project through a formally independent special-purpose vehicle (SPV). In addition to protecting against multiple project risks, this approach increases the administrative and managerial flexibility of the project.

Benefits of project finance schemes for Energy Projects

Introduction of the PF mechanism completely changes the approach to building a financial model for the energy project and thereby creats the below benefits;

•High potential for attracting financial resources, significantly exceeding the financial capabilities of sponsors.
•Minimization of project risks through their rational distribution among all participants in the energy project.
•Since the financing of the project is carried out through a newly created company, lenders do not impose strict requirements on the originator.
•Reducing country risks of the project by registering a management company (SPV subsidiary) in the host country, while the SPV itself is registered in the country of origin of the capital.
•Linking the project debt repayment schedule to the facility commissioning schedule so that the debt is fully serviced by the project’s cash flows.

If you are interested in project finance for the construction of a power plant, electrical substation or transmission line, Havelet Finance Limited is ready to provides project finance services, helping to implement capital-intensive energy projects with minimal risk and debt burden.

Havelet Finance Limited offers the following;
• Long-term investment loans.
• Project finance (PF) scheme.
• Credit guarantees.
• Investment engineering.
• Investment consulting.
• Financial modeling.
• Project management.etc.

We are also currently structuring a convertible debt and loan financing and other project financing and international loans at of 2% interest repayable annually with no early prepayment penalties.

Website: https://www.havelet-finance.com
Email: credit@havelet-finance.com