Timing of Equity Injection (Slides and Example Financial Model)
Originally published: 09/11/2021 10:48
Publication number: ELQ-76249-1
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Timing of Equity Injection (Slides and Example Financial Model)

What are the different options for timing of disbursements? How different options are presented in loan agreements? What are the commercial points to consider?

Description
The financial model, slides and video content presented here aims to answers the below questions:
❓ what are the different options for timing of disbursements?
❓ how different options are presented in loan agreements?
❓ what are the commercial points to consider?

6 options are presented and explained:

📌 Option 1: inject all equity upfront at the beginning of construction and before any drawdowns are made under the debt facilities
📌 Option 2: Pro-rata with the drawings on the debt facility throughout the construction period
📌 Option 3:inject an initial contribution upfront with the remaining prorata on each drawdown
📌 Option 4:inject an initial contribution upfront with the remaining prorata on each drawdown with catch-up
📌 Option 5:Inject an initial contribution upfront with the remaining capital after the loan has been fully utilized

the Excel template is a simple but complete project finance model.

The Excel template contains the following worksheets:
✔️QA: A worksheet aiming to keep track of questions and answers on the financial model.
✔️Inputs: Contains the model inputs structure in form of scenario analysis.
✔️Scenario Output: A tool to keep track of scenarios.
✔️Summary: Summary key inputs & Outputs like Summary Sources and Uses of Funds Cover ratios, and Shareholder return.
✔️Guide: Contains the color codes used in the model, and model structure.
✔️TableOfContent: List all worksheets in the model with links.
✔️Mastersheet: You can use it to create a new worksheet.
✔️Time: Calculation of the different timing flags and counters, used as time reference throughout the model.
✔️CapEx: Calculation of construction cost breakdown
✔️Financing: Includes:
- Calculation of sources and uses of funds during the construction period.
- Calculation of disbursement profiles
- Debt drawdowns and repayment profiles
✔️Rev&OpEx: Includes :
- Revenues of the project
- Opex calculation
- Account receivables
- Account Payables
✔️Tax: Includes calculation of:
- Depreciation
- Corporate Income tax payment
✔️Return&Ratios: Calculation of debt and equity ratios, including the debt service coverage ratio (DSCR), and equity IRR
✔️IFS: Cashflow, balance sheet and income statement on periodic basis using time inputs from "Inputs" sheet.
✔️Checks: contains model error and integrity checks

To avoid and cure the circularity in the sources and uses of funds, the model uses a copy and paste code. You need to run the code when you change construction costs and financing terms. It is not the most optimum way of resolving the issue but it's better than having an iterative model. For more on this topic check: edbodmer.com

You can use the manual and template to include the different disbursement options and flexibility in drawdowns into your own project finance models or use it for educational purposes.

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Excel and Slides

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Further information

Project Finance model and Funding Plan


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