How to develop your own project finance model

April 13th, 2009 Posted in financial models, project finance models

How to develop your own project finance model

In simplest terms, a project finance model is a business plan written in some sort of a spreadsheet implemented in software (e.g. MS Excel).

It is prepared primarily to assist a potential investor like you to assess numerous business alternatives that you might want to venture into — and decide which alternative would meet your investment objectives – capital requirement, payback, profitability or internal rate of return, cash flows and risks profile.

By preparing in advance a financial model and doing simple to complicated sensitivity tests, the potential investor is forewarned of any potential problems in advance so that mitigation measures are put in place to address such potential risks and problems.

It consists of the following worksheets (or tabs):

1) Assumption or Input worksheet

2) Capital Cost Estimation Worksheet

3) Project Schedule or Drawdown Worksheet

4) Total Project Cost Summary Worksheet (equipment, taxes, installation, land, working capital, capitalized expenses, capitalized interest during construction)

5) Loan Amortization Worksheet (interest, principal repayment)

6) Depreciation Worksheet (beginning balance, depreciation, ending balance)

7) Working Capital Worksheet (receivables, payables, stocks, training, mobilization)

8) Income & Expense Statement Worksheet

9) Balance Sheet Worksheet

10) Cash Flow Worksheet

11) Financial Ratios Worksheet

12) Report Summary Worksheet

13) Sensitivity Analysis Worksheet

For more information, please post a comment and include the details of your inquiry and interest.

Have a nice day! Hope to hear from you soon. With your own project finance model, you can prepare your own business plan for myriads of small businesses you may wish to start during this global economic depression: food, services, outsourcing, rental/leasing, manufacturing, power generation, direct lending, lending investor, etc.


If you feel that you are being benefited by this oil price bulletin, I would like to invite you and your company to continue supporting this blog thru the DONATE button.  You may order my power generation technology articles and project finance models thru the ENERGY DATA page. Thanks!

Marcial T. Ocampo

(Friendly note: All content written by Engr. Marcial T. Ocampo are copyrighted and may not be redistributed in any way or form.)

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    do you have an excel model for with the above procedures. if you don’t have may you grant me rights to develop it for you?

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