Project Finance Modelling

4 days 24-27 Oct 2016, London UK £4,295.00 + VAT* Download brochure Add to basket

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FTS Eligible - Financial Training Scheme for Singaporean citizens and PRs only (more information)

Course objectives

This course will review lessons on valuation, risk assessment and forecasting that can be derived from the financial crisis. Participants will discuss mistakes made in valuing sub-prime loans and other famous valuation errors. This provides context for other subjects in the course.

Summary of course content

  • Valuation lessons from the current financial crisis
  • How structured financial models can be created that clearly define risks and value without being overly complex
  • The fundamental factors that underlie valuation and how can they be used in practice
  • What lies behind multiples such as the P/E and the EV/EBITDA ratios and how these multiples can be used in valuation
  • How to effectively present risk analysis in valuation analysis models
  • Whether Monte Carlo simulation and mathematical techniques can realistically be used to assess risk and compute value
  • The valuation of debt and measurement of debt capacity to provide alternative ways to value investments
  • The creation of models specifically used to evaluate LBOs, project finance and M&A


Case studies, hands-on analysis and template models will be used as the primary teaching tools in the programme. If you are interested in practical mechanics of excel (macros, combo boxes, offset and indirect functions etc.) these can also be discussed after the course.

Other than the instruction in how to build, use and analyse financial models, you will receive a comprehensive suite of financial modeling software on CD that includes a number of template models and Excel add-ins.

The software consists of corporate models that accept historic financial data and generate alternative valuation measures; M&A models that consolidate two companies using alternative financing assumptions and produce accretion and dilution estimates; project finance models that measure the effect of alternative elements in a cash flow waterfall including debt service reserves, junior debt, covenants, defaults and pre-payments; LBO models that measure the debt capacity of a transaction; option pricing models that account for alternative structures; and debt valuation spreadsheets, Monte Carlo simulation models, tornado diagram and sensitivity analysis.

Computer-based exercises

This course will make extensive use of modelling exercises in Excel®
All delegates should bring their own laptops loaded with Microsoft Excel® 2010 or later to facilitate inclass
studies and exercises.

Free CD to take-away

Delegates will receive a comprehensive suite of financial modelling software on a CD that includes a number of template models and excel add-ins.

Pre-course survey

Book early and fill in our pre-course survey to ensure your specific needs are met in the course by the trainer.

FTS Eligible

This programme is approved for listing on the Financial Training Scheme (FTS) Programme Directory and is eligible for FTS claims subject to all eligibility criteria being met.

Please note that in no way does this represent an endorsement of the quality of the training provider and programme. Participants are advised to assess the suitability of the programme and its relevance to participants’ business activities or job roles.

The FTS is available to eligible entities, at a 50% funding level of programme fees, subject to a cap of $2,000/participant/programme and all eligibility criteria being met. FTS claims may only be made for programmes listed on the FTS Programme Directory with specified validity period. Please refer to for more information.

Who should attend

  • Corporate Finance/Corporate Treasury
  • Capital Markets
  • Audit/Product Control/Risk Management/ALM
  • Research and Analysis
  • Sales and Trading
  • Investment Management
  • Origination
  • Securitisation/Syndication
  • Structured Finance
  • Money Markets/Repo
  • Systems Programming
  • Funding
  • Government/Agency Funding and Investment
  • Regulation/Compliance/Documentation
  • Instructors

    We work with a series of expert instructors, please select the course location of interest to review the credentials of who will be delivering the programme.

    Ed Bodmer
    Ed has created innovative forward pricing, productivity measurement and investment valuation software for consulting clients throughout the United States. He has taught energy economics and finance throughout the world, and formulated significant government policy and corporate strategy in the U.S. 

    His consulting clients include investment banks, commercial banks, research institutions and government agencies on a wide variety of complex valuation and advisory matters. He has constructed a unique framework for electricity price forecasting and valuation using production cost modelling techniques combined with option price theory and Monte Carlo simulation.

    He is also an adjunct professor at leading University where he teaches courses in microeconomics. Along with his practical experience that covers a multitude of major advisory projects, he has taught specialised courses in financial modelling, electricity pricing, option valuation, mergers and acquisitions and contracting to investment banks, commercial banks, industrial corporations and electric utility companies.

    He was formerly Vice President at the First National Bank of Chicago where he directed analysis of energy loans and also created financial modelling techniques used in advisory projects. He has used the models in providing expert testimony on subjects ranging from capital structure to investments in multi-billion dollar nuclear plants to complex valuation of new investments.

    He received an MBA degree specialising in econometrics (with honours) from the University of Chicago and a BS degree in finance from the University of Illinois (with highest university honours). He has written many articles and is in the process of completing a textbook on valuation of electricity assets.



    Central London Hotel Venue

    All courses are held at four or five star venues in Central London, Zone 1. We strive to provide you with a training environment of the highest quality, to ensure that the whole learning experience exceeds your expectations.

    Your training venue will be confirmed by one of our course administrators approximately 3-4 weeks before the course start date.

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    We’ll be here to support you every step of the way. From the initial consultancy through to evaluating the success of the full learning experience. We'll ensure you get the maximum return on your training investment.

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    Day 1

    Project finance modelling

    What are financial models used for in project finance?

    Introduction to the modelling exercise

    • Developing a project finance model for an independent power project (IPP)
    • How the exercise applies to other types of project What is involved in building a financial model?
    • How to approach the problem
    • Gathering the information you will need
    • Understanding the requirements of the model
    • The structure of a model
    • Materiality

    Good modelling practice

    • How to structure your models so that they can easily be understood and audited
    • Separating assumptions from calculations
    • Assumptions required for construction phase calculations
    • Sources of information
    • Project timings
    • Costs and timing of costs

    Practical exercise: participants will start to construct their project finance models. They will be taught how to use named ranges and learn how to establish a timeline using date functions. The course director will provide guidance on the use of Excel where necessary and will break to highlight key learning points.

    Modelling the effects of inflation

    • The use of real and nominal values
    • How to tackle indexation
    • The importance of timing of the costs

    Modelling in multiple currencies

    • Setting up your model to work with more than one currency
    • The use of forward exchange rate curves and purchasing power parity

    Construction phase sensitivities

    • Discover how to set up sensitivities

    Using lookup functions

    • Introduction to the choice of lookup functions
    • Why we use lookup functions
    • Problems associated with lookup functions

    Construction phase funding

    • Modelling interest during construction
    • How to calculate commitment and arrangement fees
    • Building a debt tracking account

    Circular references

    • What are they?
    • How do they occur?
    • Why should we avoid them?

    Practical exercise: participants will develop a construction funding worksheet including idc, commitment fees and a debt tracking account

    Day 2

    Review of first day’s topics

    • Summary and Q&A session

    During day 2, participants will continue to build their models, adding operating phase revenues and costs

    Modelling project revenues

    • How are the revenues of project financed projects structured
    • The reasoning behind tariff structures
    • The differences between capacity, availability and output
    • Modelling bonus and penalty mechanisms
    • Dealing with multiple currency tariffs

    Operating revenue assumptions

    • Source of assumptions
    • Operating revenue sensitivities
    • The effects of over / under performance

    Practical exercise: participants will build operational revenue calculations including fixed/variable tariff elements and bonus/penalty mechanisms. The course director will also show real life examples of thesemechanisms.

    Setting up the operating costs calculations

    • Source of assumptions
    • Operating cost sensitivities

    Practical exercise: participants will develop operational cost calculations including fixed and variable components applying the relevant indexation to each of the cost items.

    Modelling taxation

    • Modelling different types of depreciation
    • Carrying tax losses

    Practical exercise: participants will develop tax calculations including depreciation and a tax loss tracking account.

    Day 3

    Review of second day’s topics

    • Summary and Q&A session followed by quiz

    Determining the project’s debt capacity

    • Sources of funding

    Practical exercise: participants will develop funding calculations including base and standby debt tracking accounts and debt service reserve account.

    How to model different senior debt structures

    • Refinancing
    • Cash sweep mechanisms
    • Bullet loans

    How to construct a cashflow statement

    Key funding ratios

    • Introduction to NPV and IRR
    • Calculating cash available for debt service
    • Learn how to calculate annual debt service cover ratios and loan life cover ratios

    Practical exercise: participants will develop a cashflow worksheet including calculation of key funding ratios. They will learn how to calculate the debt capacity based on these funding ratios.

    Model optimisation

    • Adjusting repayment profiles to maximise debt capacity

    Use of macros

    • How they are used in project finance deals
    • The dangers and precautions that could be taken Income statement
    • Pulling together relevant information to produce an income statement
    • Dividends and other points related to equity financing

    Balance sheet

    • Constructing a balance sheet
    • Techniques for balancing
    • Using the balance sheet as an internal check on your model

    Techniques for project appraisal

    • Evaluating investor returns
    • Using the offset function

    Day 4

    Review of first 3 day’s topics

    Summary and Q&A session followed by quiz

    Output from financial model

    • Producing reports
    • Examples from real life projects developed by the course director

    Risk assessment

    • Sensitivity and break-even / default analysis
    • Pre-completion and post completion risks

    Problem solving session: participants are invited to ask questions related to using the models they have built in their own workplaces, or ask questions related to models they have inherited.

    Course summary and close

    Why us

    We have a combined experience of over 60 years providing learning solutions to the world’s major organisations and are privileged to have contributed to their success. We view our clients as partners and focus on understanding the needs of each organisation we work with to tailor learning solutions to specific requirements.

    We are proud of our record of customer satisfaction. Here is why you should choose us to help you achieve your goals and accelerate your career:

    • Quality – our clients consistently rate our performance ‘excellent’ or ‘outstanding’. Our average overall score awarded to us by our clients is nine out of ten.
    • Track record – we have delivered training solutions for 95% of worlds’ top 100 banks and have trained over 250,000 professionals.
    • Knowledge – our 150 strong team of industry specialist trainers are world leading financial leaders and commentators, ensuring our knowledge base is second to none.
    • Reliability – if we promise it, we deliver it. We have delivered over 20,000 events both in person and online, using simultaneous translation to delegates from over 180 countries.
    • Recognition – we are accredited by the British Accreditation Council and the CPD Certification Service. In an independent review by Feefo we scored 96% on service and 95% on product