Publication number: ELQ-99357-1
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Equity Return Metrics in a Project Finance Structure: Equity IRR (Excel Template and PDF Guide)
This template and guideline aims to show different equity IRR calculation in a project finance transaction
This template and guideline aims to address the following issues:
✅ What it is Eq. IRR and how to interpret it?
✅ What is the basis for the hurdle rate?
✅ How is Equity IRR calculated?
✅ Different Equity IRRs
✔ Pure Equity IRR
✔ Shareholder Loan IRR
✔ Blended Equity IRR at Financial Close
✔ Blended Life-cycle Equity IRR
The Excel template is not a complete model but it's an extraction from a complete project finance model. You can use it to understand the different Equity IRR concepts or you can insert it within your own financial models and make the links.
The Excel Template contains the following worksheets:
🧩 Guide: contains the color codes, guide to worksheet structure
🧩 Inputs: This sheet contains Timing assumptions used for creating the timeline. Inputs are formatted in light yellow cells and blue font.
🧩 Time: a calculation sheet containing flags and counters related to timeline. Since this is not a complete model, most flags and counters are idle and not linked. However, you can use it as a template in your models to create a master timeline in your project finance models.
🧩 IRR: This sheet includes calculation of different equity IRRs ( Pure Equity IRR, Shareholder Loan IRR, Blended Equity IRR at Financial Close, Blended Life-cycle Equity IRR). Cash inflows and outflows needed to calculate the different equity IRRs are formatted in red font and are hard-coded. User can make the link within their own worksheets.
🧩 Data4charts: contains data required to create charts inserted in the "Summary sheet" and basically Waterfall and bar charts summarizing different cash inflows and outflows.
🧩 Summary: This sheet contains the 4 different IRRs with charts summarizing differed cash inflows and outflows. This sheet can be further expanded and converted into a Dashboard by user in a complete project finance model. User can use it as a starting point to build a summary sheet including summary sources and uses of funds, debt metrics and summary financial statement with key assumptions with different button and switches to make it interactive.
This Best Practice includes
1 PDF manual and 1 Excel template
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