The training programme will provide participants with sets of techniques, greater understanding and hands-on practice in:
- Building financial models for project finance transactions, specifically those related to infrastructure and PPP projects
- Structuring financial models using best practice, to facilitate ease of change or updating and ease of understanding for other model users
- Building scenarios for analysis and stress-testing of the model
- Using the model to analyse forecast cash flows, choose between options and to assess risk
- Practically using models to support credit reviews and allocations of funding
The emphasis in this program is on learning skills about best practice in building financial models and the detailed techniques and calculations involved, with particular application to infrastructure project finance. Many techniques taught have use in other applications, such as corporate finance, but the emphasis will remain firmly on project finance modelling. The use of models to understand and analyze a project will be covered briefly, but it is essentially a practical hands-on course in detailed building techniques. It should not be regarded as a general Microsoft Excel training course, although the models built will use Excel software; rather, the emphasis is on applying excel to model and analyze project finance transactions. By the end of the course, participants will have produced the main building blocks of a well-structured integrated financial model for an infrastructure transaction. As a result of this training, participants will be capable of building up a robust model, which can be rapidly changed, is flexible and is consistent in its logic and treatment of components of cash flow. They will be able to use Excel tools to facilitate sensitivity analysis, build cash flow cascades, solve circular references and write simple macros.
Who should attend?
The course is intended for junior analysts with a few years’ experience in analysis and valuation, with a good (but not necessarily comprehensive) knowledge of Excel. It is therefore expected that participants will be familiar with the fundamental principles of business risk analysis and investment appraisal techniques and the key features of financial instruments. They should be able to navigate around large Microsoft Excel worksheets and be familiar with the core functions of Microsoft Excel, such as copy, paste, sum, round and sumproduct, logic functions such as IF, AND, and OR, simple lookups, and financial functions such as NPV, IRR, PMT and FV. Limited practical experience of corporate and project finance will be assumed.
To enhance the benefit of the training we suggest that participants are provided with:
- A core financial model of an infrastructure project that will be used during the training
- A reference book which includes comprehensive examples of best practice in financial modelling
- A list of Excel functions to be used during the course, with details of required inputs and explanation of what the function does
The course is intensive, and requires focus from the delegates to absorb a large range of material in just three days. We encourage active involvement of the participants, questions and answers, and discussion. Concepts will be presented through formal presentations and demonstrated examples. which can be followed by delegates on their own laptop computers; supervised exercises are then used to practice and reinforce understanding of the topics. Each exercise has a suggested answer for self-review or review in the class. These exercises cumulatively build the basics of a fully-integrated infrastructure model which is used as the core case study throughout the training programme.
Case studies and exercises
Case studies will focus on putting into practice modelling techniques, and participants will gradually build an infrastructure PPP model themselves using techniques and principles as they are taught and demonstrated. Each exercise is designed to be done either in teams or individually, and is self-contained in terms of putting into practice a limited degree of model-building. The exercises build on one another, until a full-scale, integrated model has been built using best-practice techniques. Model answers are available for each, and are reviewed in the class for participants to check their own work; these models can be used as a reference source later when participants are back in their normal work environments.