|
Project finance is only possible when the project is capable of producing enough cash to cover all operating and debt-servicing expenses over the whole tenor of the debt. A financial model is needed to assess economic feasibility of the project. Model's output is also used in structuring of a project finance deal. Most importantly, it is used to determine the maximum amount of debt the project company can have and debt repayment profile, so that in any year the debt service coverage ratio (DSCR) should not exceed a predetermined level. DSCR is also used as a measure of riskiness of the project and, therefore, as a determinant of interest rate on debt. Minimal DSCR set for a project depends on riskiness of the project, i.e. on predictability and stability of cash flow generated by it. As a rule of thumb, DSCR should not be less than 1.60. However, in some cases (such as power plant projects with strong off-take agreements) it could be set at as low as 1.15. ==General structure== A general structure of any financial model is very simple: input – calculation algorithm – output. While the output for a project finance model is more or less uniform and the calculation algorithm is predetermined by accounting rules, the input is highly project-specific. Generally, it can be subdivided into the following categories: * Variables needed for forecasting revenues * Variables needed for forecasting expenses * Capital expenditures * Financing 抄文引用元・出典: フリー百科事典『 ウィキペディア（Wikipedia）』 ■ウィキペディアで「Project finance model」の詳細全文を読む スポンサード リンク
|