New Best Entrant Project Finance Model with VAT – landfill, diesel, coal, oil, natgas
April 24th, 2010 Posted in financial models
New Best Entrant Project Finance Model with VAT – landfill, diesel, coal, oil, natgas
A new “Best New Entrant” project finance model with value added tax (VAT) has been developed to analyze which of the following technology such as landfill gas to power, diesel engine, coal thermal (pulverized, CFB), oil thermal or natural gas CCGT is the best new entrant providing overall effectiveness in terms of first year tariff and equity returns.
To order, simply proceed to the ENERGY DATA page of this blog and select large scale models, then order via PayPal the desired model.
Alternatively, you may confirm your order via email, then I will email you my local bank details where you may send via wire transfer the payment.
Upon receipt via PayPal or my local bank account, I will then email you two copies of the ordered models.
Regards,
Marcial Ocampo
Energy & Business Development Consultant
——————————
a) Summary sheet
| Executive Summary | (C) Copyright 2009 by Marcial T. Ocampo (November 2009) | |||||||
| Coal Thermal Plant (CFB) | Benguet Mining Corporation | |||||||
| 2011 | 2012 | |||||||
| Investors’ Returns: | (0) | NPV-FC | Generation and Sales: | 20 year ave. | Year 1 | Year 2 | ||
| Equity IRR (% p.a.) | 15.00% | Capacity Factor (% of rated) | 91.57% | 90.11% | 89.68% | |||
| Payback Period (years) | 8.54 | Days per year | 365.24 | 365 | 366 | |||
| Hours per day | 24 | 24 | 24 | |||||
| Uses and Sources of Funds During Construction: | 000 PhP | $ / kW | Gross Generation (MWh/year) | 144,486 | 142,091 | 141,788 | ||
| Power Plant Own Use (%): | 77.778% | 77.778% | 77.778% | |||||
| Uses of Funds: | 112,378 | 110,516 | 110,280 | |||||
| Net Generation (MWh/year) | 32,108 | 31,576 | 31,509 | |||||
| Initial investment in land (PhP/ha), 1 ha = 10,000 m2 | 20,000 | $23 | Transmission Line Loss assumed (%): | 0.000% | 0.000% | 0.000% | ||
| 0 | 0 | 0 | ||||||
| Engineering, Procurement & Construction (EPC): | Net Sales (MWh/year) | 32,108 | 31,576 | 31,509 | ||||
| Freight on Board = FOB USA = $/kW | 13,440,000 | $15,556 | ||||||
| Ocean Freight = FRT = 5% x FOB | 672,000 | Transmission Line: | ||||||
| Insurance = INS = 1% x FOB | 134,400 | Line Voltage | 138 | kV | ||||
| Cargo, Insurance & Freight = CIF = FOB + FRT + INS | 14,246,400 | Power | 200,000 | kW | ||||
| Value Added Tax = VAT = 12% x CIF | 1,709,568 | Length | 10.000 | km | ||||
| Customs Duty = (CIF + VAT) x (% Duty) x (1 + % VAT) | 536,121 | Power Factor | 0.850 | lag | ||||
| Duty-Paid Landed Cost = DPLC = CIF + VAT + Duty | 16,492,089 | No. of Circuit | 3 | |||||
| Local Freight Cost = LFC = 3% x CIF | 427,392 | Transmission Line Loss calculated (%) | 1.138% | |||||
| Delivered Cost at Site = DCS = DPLC + LFC | 16,919,481 | Cost per km: | 18,000,000 | PhP | ||||
| Installation Cost = IC = 5% x FOB | 672,000 | 375,000 | $ | |||||
| Condenser Cooling System, $ | 67,495 | Capital and O&M Cost Assumptions: | ||||||
| Transmission Line, $ per km and km length | 180,000 | Cost per kW FOB USA ($/kW) | 1,400 | 2011 | 2012 | |||
| Total EPC = DCS + IC+ CCS + T/L | 17,838,976 | Variable O&M ($/kWh): | 0.00325 | Year 1 | Year 2 | |||
| Contingency (10%) = EPC x 10% | 1,783,898 | Total Fuel Costs | 1,673,151 | 1,677,929 | ||||
| Documentary Stamps (1%) = EPC x 1% = DS | 178,390 | Expenses from lube purchase | 68,389 | 68,585 | ||||
| Total Fixed Assets (EPC + Contingency + DS) | 19,801,263 | $22,918 | Purchase of chemical materials – 100% | 91,619 | 91,423 | |||
| Utilities (electricity, water) – 150% | 137,428 | 137,135 | ||||||
| Capitalized Expenses: | DOE 1-04 (0.01 PhP/kWh sold) | 14,683 | 14,651 | |||||
| Development costs (modeler, developer) | 198,213 | Fixed O&M ($/kW/year): | 0.2250 | |||||
| Other Costs including taxes, contingencies | 2,378,552 | Maintenance of the installation – 100% | 1,096,633 | 1,094,293 | ||||
| Carbon Emission Registration & Consultancy | 0 | Personnel expense – 50% | 548,317 | 547,147 | ||||
| Initial investment in capitalized expenses | 2,576,764 | $2,982 | Land lease, rent – 30% | 328,990 | 328,288 | |||
| Other services – 20% | 219,327 | 218,859 | ||||||
| Working Capital: | months | Taxes, Insurances, Benefits & Regulatory Costs | 571,450 | 499,054 | ||||
| Working capital (adjustments for DSCR = 1.1) | 0 | DSRF Expense | 3,540 | 3,540 | ||||
| Total Fuel Costs | 278,858 | 2 | ||||||
| Expenses from lube purchase | 11,398 | 2 | Debt Service Reserve Fund: | |||||
| Purchase of chemical materials – 100% | 15,270 | 2 | Months of debt service | 6 | ||||
| Utilities (electricity, water) – 150% | 34,357 | 3 | DSRF Income on FCDU | 4.0% | ||||
| DOE 1-04 (0.01 PhP/kWh sold) | 3,671 | 3 | WHTax on FCDU | 7.5% | ||||
| Maintenance of the installation – 100% | 274,158 | 3 | DSRF Expense | 0.30% | ||||
| Personnel expense – 50% | 137,079 | 3 | Taxes and Regulatory Costs: | |||||
| Land lease, rent – 30% | 27,416 | 1 | Value Added Tax – 12% | 12.00% | ||||
| Other services – 20% | 18,277 | 1 | Special Privilege Tax – 2% | 0.00% | ||||
| Total Working Capital | 800,485 | $926 | Special Realty Tax – 2.5% | 0.00% | ||||
| DOE 1-94 : 0.01 PhP/kWh sales | 0.01 | |||||||
| Interest During Construction (IDC): | Corporate income tax rate (% of taxable income) | 30% | ||||||
| Dev’t fees (developer, loan arranger) | 57,996 | Income tax holiday (ITH), years | 0 | |||||
| Front end fees (modeler, loan arranger) | 57,996 | Profit Sharing, % of IAT | 0.00% | |||||
| Commitment fees (bank) | 231,985 | Social Benefit Fund – Host Community, PhP/month | 0 | |||||
| Interest During Construction (bank) – 36 months | 3,231,553 | |||||||
| Total Legal & Financing Fees and IDC | 3,579,530 | $4,143 | Working Capital Needs (WCN): | months | ||||
| Cash needed for operations (+) | 3.00 | |||||||
| Total Uses of Fund, ’000 PhP | 26,778,043 | 1,487,669 | Customers / Receivables (+) | 1.00 | ||||
| Total Uses of Fund, ’000 US$ | $557,876 | $30,993 | Stocks / Inventory (+) | 2.00 | ||||
| Suppliers / Payables (-) | 1.00 | |||||||
| Sources of Fund: | ||||||||
| Exchange Rate and Escalation: | 0 | No Escalation | ||||||
| % to be financed by capital | 8,033,413 | 30.00% | Exchage Rate, PhP / US$ | 48.00 | 0.00% | depreciation | ||
| % to be financed by non refundable subsidy | 0 | 0.00% | RP CPI (Local) | 5.00% | local escalation | |||
| % to be financed by debt | 18,744,630 | 70.00% | US CPI (Foreign) | 2.50% | foreign escalation | |||
| Total Sources of Fund, ’000 US$ | 26,778,043 | 100.00% | Tariff Escalation | 6.2079 | 0.00% | tariff escalation | ||
| Variable O&M: | weight | 0.00% | variable escalation | |||||
| Weighted Average Cost of Capital (WACC): | Returns | % Local (30%) | 30.00% | 5.00% | ||||
| Equity | 15.00% | 30.00% | % Foreign (70%) | 70.00% | 2.50% | |||
| Subsidy | 0.00% | 0.00% | Fixed O&M: | weight | 0.00% | fixed escalation | ||
| Debt | 7.00% | 70.00% | % Local (70%) | 70.00% | 5.00% | |||
| WACC | 9.40% | % Foreign (30%) | 30.00% | 2.50% | ||||
| Loan: | Fuel & Lubes Properties: | Btu/lb | kg/L | |||||
| Interest rate of debt, % p.a. | 7.00% | Diesel Oil – engine, CCGT | 19,650 | 0.8448 | ||||
| Loan term, years | 12 | Low Sulfur Fuel Oil (LSFO – 1% S) – cogen, CCGT | 18,400 | 0.9659 | ||||
| Grace period (construction period), months | 3.00 | Lube Oil | 0.8500 | |||||
| Fuel & Lubes Costs & Escalation: | PhP/L | |||||||
| Rated Capacity: | Diesel Oil – engine, CCGT | 31.11 | 0.00% | diesel escalation | ||||
| Unit Capacity of WTG (MW/unit) | 18.000 | Low Sulfur Fuel Oil (LSFO – 1% S) – cogen, CCGT | 22.16 | 0.00% | bunker escalation | |||
| No. of TWG (unit) | 1 | Lube Oil | 155.40 | 0.00% | lube escalation | |||
| Total Gross Installed Capacity (MW) | 18.000 | Plant Heat Rate and Lube Oil Rate: | ||||||
| Plant Own Use (MW) | 14.000 | 77.78% | Diesel Engine Heat Rate (Btu/kWh gross) | 10,614 | ||||
| Net Capacity (MW) | 4.000 | Lube Oil Consumption Rate (g/kWh) | 0.2535 | |||||
b) Input sheet
| Instructions for Running this Project Finance Model (by Marcial T. Ocampo) – US Dollar Model | Licensed for: | Benguet Mining Corporation | |||||||||
| Enter the required data starting from the first step to the last step, then converge the model by pressing ctrl + e | press ctrl + e to converge model (DCF IRR) | ||||||||||
| 0) | 1 | Include VAT (1) no VAT (0) | 12.00% | Blue cells are input fields for updating | |||||||
| 0 | Include Carbon Emission Credits (1), no CER (0) | 12 | years | These cells are case switches | |||||||
| 0 | Include Depreciation (1), no depreciation (0) of Peso to $ | ||||||||||
| 1) | 3 | Define the NPV and return IRR to be used (1-3). | |||||||||
| 0 | NPV-ROI | return on investment (100% equity, 0% debt) – project cost versus cash flow | |||||||||
| 0 | NPV-ROE | return on equity (say 30% equity, 70% debt) – equity portion of project cost versus cash flow | |||||||||
| 1 | NPV-FC | return on equity (say 30% equity, 70% debt) – equity portion of project cost versus dividends flow (free cash) – default | |||||||||
| 48.00 | Exchage Rate, PhP / US$ | ||||||||||
| 2) | 5.00% | RP CPI (Local) | Philippine escalation rate, % p.a. | ||||||||
| 2.50% | US CPI (Foreign) | US escalation rate, % p.a. | |||||||||
| 3) | 2010 | Define the end of construction period (year 0). | It assumes everything has been constructed and finished at the end of this year (0) and will operate on following year (1). | ||||||||
| 4) | Rated Capacity and Losses | Unit Capacity | No. of Units | ||||||||
| 200.000 | Rated Capacity (RC), MW | 100.000 | 2 | ||||||||
| 7.000% | Power Plant Own Use | 14.000 | |||||||||
| 1.138% | Transmission Line Losses (10 km line) | Select red cells below for T/L losses | |||||||||
| Transmission Line Losses | |||||||||||
| Line Voltage | 138 | kV | km | 1.609 | |||||||
| Power | 200,000 | kW | mile | 1 | |||||||
| Length | 10.00 | km | feet | 5280 | |||||||
| Power Factor | 0.85 | lag | |||||||||
| Total Line Current | 984.399 | A | resistivity of Al | 20 | 17.002 | ohm-cmil/ft | |||||
| Line Current/Circuit | 328.133 | A | 25 | 17.345 | ohm-cmil/ft | ||||||
| No. of Circuit | 3 | ||||||||||
| Transmission Line | Cost of T/L | Cost of T/L | With 50% | ||||||||
| Used | Conductor Type | Ampacity | Resistance (ohms/mile) | Loss (3-phase)* | $ / km | PhP / km | allowance | ||||
| ACSR (MCM) | A | 25 deg.C | 50 deg.C | 90 deg.C | kW | % | |||||
| 0 | 336 | 530 | 0.278 | 0.306 | 0.351 | 5469.63 | 2.735% | $250,000 | 12,000,000 | 4.10% | |
| 0 | 795 | 900 | 0.119 | 0.138 | 0.168 | 2617.57 | 1.309% | $333,333 | 16,000,000 | 1.96% | |
| AAC (MCM) | A | 20 deg.C | 25 deg.C | 90 deg.C | kW | ||||||
| 0 | 336 | 495 | 0.267 | 0.273 | 0.343 | 5342.32 | 2.671% | $291,667 | 14,000,000 | 4.01% | |
| 1 | 789 | 855 | 0.114 | 0.116 | 0.146 | 2275.05 | 1.138% | $375,000 | 18,000,000 | 1.71% | |
| USED | 1.138% | $375,000 | 18,000,000 | 1.71% | |||||||
| 5) | Capacity Factor (365 days, 5 year cycle) | 1 | 2 | 3 | 4 | 5 | Average | ||||
| 28 | Planned Overhaul, days (4 wks) | 28 | |||||||||
| 14 | Regular Maintenance, days (2 wks) | 14 | 14 | 14 | 14 | ||||||
| 0.10% | Economic S/D, % of CD | 0.365 | 0.365 | 0.365 | 0.365 | 0.365 | |||||
| 0.50% | Deactivated S/D – External, % of CD | 1.825 | 1.825 | 1.825 | 1.825 | 1.825 | |||||
| 5.00% | Forced Outage – Internal, % of CD | 18.25 | 18.25 | 18.25 | 18.25 | 18.25 | |||||
| 100.00% | Load Factor, % of DC | 34.44 | 34.44 | 34.44 | 34.44 | 48.44 | 37.24 | vary load factor to hit 75% | |||
| 91.04% | Capacity Factor, % of RC | 330.56 | 330.56 | 330.56 | 330.56 | 316.56 | 327.76 | ||||
| CD = Calendar Days (365 days per year) | 91.82% | 91.82% | 91.82% | 91.82% | 87.93% | 91.04% | |||||
| RC = Rated Capacity, MW | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | |||||
| DC = Dependable Capacity, MW (after degradation) | 91.82% | 91.82% | 91.82% | 91.82% | 87.93% | 91.04% | |||||
| 6) | Define overhaul cycle and capacity degradation | ||||||||||
| 0.50% | Normal, % p.a. | normal degradation rate | |||||||||
| -2.00% | Overhaul, % p.a. | degradation recovered after overhaul | |||||||||
| 5 | Overhaul Cycle, yr | overhaul cycle | |||||||||
| 80.00% | Recovery, % | fraction of normal degradation recovered during overhaul | |||||||||
| 7) | Define overhaul cycle and heat rate degradation | ||||||||||
| 0.50% | Normal, % p.a. | normal degradation rate | |||||||||
| -2.00% | Overhaul, % p.a. | degradation recovered after overhaul | |||||||||
| 5 | Overhaul Cycle, yr | overhaul cycle | |||||||||
| 80.00% | Recovery, % | fraction of normal degradation recovered during overhaul | |||||||||
| 8) | 4 | Plant Heat Rate (enter type of engine, 1-3) | 1=CCGT | 2=Cogen | 3=Diesel | 4=Thermal | |||||
| GT | Gas Turbine Output (1 / 3) | 33.33% | 77.00% | 40.00% | |||||||
| ST | Steam Turbine Input (2 / 3) | 66.67% | 23.00% | ||||||||
| BE | Boiler Efficiency at 1% cont. BD | 85.00% | 85.00% | 90.00% | vary this entry to hit 23% | ||||||
| STE | Steam Turbine Efficiency | 40.00% | 37.00% | 40.00% | |||||||
| ME | Mechanical Drive / Clutch Efficiency | 99.00% | 99.00% | 97.00% | 95.00% | ||||||
| GE | Generator Efficiency | 98.00% | 96.00% | 96.00% | 94.00% | ||||||
| OE | 32.15% | Overall Efficiency=(GT+ST*BE*STE)*ME*GE | 54.33% | 80.06% | 37.25% | 32.15% | |||||
| Plant Heat Rate at 100% eff. (3600 / 1.05506), Btu/kWh | 3412.12822 | ||||||||||
| PHR | Plant Heat Rate, Btu / kWh = 3412/ OE | 6,280 | 4,262 | 9,160 | 10,613 | ||||||
| 0 | 0 | 0 | 1 | ||||||||
| 9) | Define fuel properties | GHV, Btu/lb | NHV, Btu/lb | GHV / NHV | kg / Liter | Btu/liter | Reference | $/MMBtu | PhP / liter 2010 | ||
| 0.00% | Natural Gas (Malampaya Gas) – main fuel | 22,129 | 20,249 | 1.093 | 2010 | $GJ | 8.628 | 9.10 | 414.14 | PhP/GJ | |
| 0.00% | Diesel Oil – backup fuel (gas pipeline downtime) | 19,650 | 18,453 | 1.065 | 0.8448 | 36,597 | 46.44 | 17.71 | 31.11 | PhP/liter | |
| 3.00% | Low Sulfur Fuel Oil (LSFO – 1% S) – boiler fuel | 18,400 | 17,449 | 1.055 | 0.9659 | 39,181 | 35.97 | 11.78 | 22.16 | PhP/liter | |
| 0.00% | Bunker Fuel Oil (BFO – 3% S) – boiler fuel | 19,670 | 18,565 | 1.060 | 0.8916 | 38,664 | 34.84 | 12.57 | 23.34 | PhP/liter | |
| 97.00% | Coal (Lignite, Bituminous, Anthracite) – thermal | 10,000 | 9,475 | 1.055 | $42.55 | 1.93 | 2.04 | PhP/kg | |||
| 0.00% | Biomass (Solid Waste, Woodwaste) – per kg | 4,000 | 3,463 | 1.155 | 1.20% | 0.63 | 0.27 | PhP/kg | |||
| Lube Oil | 0.8500 | 232.00 | 155.40 | PhP/liter | |||||||
| 3600 | kJ/kWh | 2.2046 | lb/kg | 1.05506 | kJ/Btu | ||||||
| 1000 | kg/MT | 3.7854 | L/gallon | ||||||||
| 10) | Lube Oil Consumption | ||||||||||
| 0.50% | Normal, % p.a. | normal degradation rate | |||||||||
| -2.00% | Overhaul, % p.a. | degradation recovered after overhaul | |||||||||
| 5 | Overhaul Cycle, yr | overhaul cycle | |||||||||
| 80.00% | Recovery, % | fraction of normal degradation recovered during overhaul | |||||||||
| 0.254 | Ideal Lube Oil Consumption, g/kWh | ||||||||||
| 11) | 0 | Escalate fuel, lubes, tariff and O&M costs? (1=yes, 0=no) | Used | ||||||||
| 3.00% | Natural Gas (Malampaya Gas) – main fuel | 0.00% | |||||||||
| 3.50% | Diesel Oil – backup fuel (gas pipeline downtime) | 0.00% | |||||||||
| 2.50% | Low Sulfur Fuel Oil (LSFO – 1% S) – boiler fuel | 0.00% | biomass price is tied-up to LSFO price | ||||||||
| 2.00% | Bunker Fuel Oil (BFO – 3% S) – boiler fuel | 0.00% | |||||||||
| 2.00% | Coal (Lignite, Bituminous, Anthracite) – thermal | 0.00% | |||||||||
| 2.50% | Biomass (Solid Waste, Woodwaste) – per kg | 0.00% | |||||||||
| 5.00% | Lube Oil | 0.00% | |||||||||
| 5.00% | Electricity Tariff and regulatory costs | 0.00% | |||||||||
| 12) | % p.a. | Escalation rates for tariff and O&M costs | Used | Foreign (US) | US CPI | Local (RP) | RP CPI | ||||
| 3.25% | Purchase of chemical materials – 100% | 0.00% | 70.00% | 2.50% | 30.00% | 5.00% | variable O&M | ||||
| 3.25% | Utilities (electricity, water) – 150% | 0.00% | 70.00% | 2.50% | 30.00% | 5.00% | variable O&M | ||||
| 4.25% | Maintenance of the installation – 100% | 0.00% | 30.00% | 2.50% | 70.00% | 5.00% | fixed O&M | ||||
| 4.25% | Personnel expense – 50% | 0.00% | 30.00% | 2.50% | 70.00% | 5.00% | fixed O&M | ||||
| 4.25% | Land lease, rent – 30% | 0.00% | 30.00% | 2.50% | 70.00% | 5.00% | fixed O&M | ||||
| 4.25% | Other services – 20% | 0.00% | 30.00% | 2.50% | 70.00% | 5.00% | fixed O&M | ||||
| 13) | Define electricity sales & revenues | Factor | Adjustment | ||||||||
| 70.00% | Electricity sales to DU, MWh | 0.950 | -5.00% | discount price to direct customers (e.g. -10%) | |||||||
| 20.00% | Electricity sales to NPC, MWh | 1.000 | 0.00% | reference price to national grid (e.g. 0%) | |||||||
| 10.00% | Electricity sales to WESM, MWh | 1.150 | 15.00% | wholesale spot market price (e.g. +15%) | |||||||
| 100.00% | Total must add to 100% | ||||||||||
| Escalation | Byproduct Sales | PhP/MT | |||||||||
| 5.00% | Income from garbage tipping fee, ’000 PhP | 0 | |||||||||
| for cogen only | Coal Thermal Plant (CFB) | ||||||||||
| 14) | months | Define working capital for initial project cost (months) | 000 $/year | Working Capital | PSMA | Paul Breeze | |||||
| 2 | Total Fuel Costs | 1,673,151 | 278,858 | ||||||||
| 2 | Expenses from lube purchase | 68,389 | 11,398 | ||||||||
| 2 | Purchase of chemical materials – 100% | 91,619 | 15,270 | variable O&M | 0.700 | PhP/kWh | 0.00325 | $/kWh | |||
| 3 | Utilities (electricity, water) – 150% | 137,428 | 34,357 | ||||||||
| 3 | Special Privilege Tax – 1% | 0 | 0 | ||||||||
| 3 | Special Realty Tax – 1.5% | 0 | 0 | ||||||||
| 3 | DOE 1-04 (0.01 PhP/kWh sold) | 14,683 | 3,671 | ||||||||
| 3 | Maintenance of the installation – 100% | 1,096,633 | 274,158 | fixed O&M | 0.846 | PhP/kWh | 0.2250 | $/kW/year | |||
| 3 | Personnel expense – 50% | 548,317 | 137,079 | land lease from NorthWind | |||||||
| 1 | Land lease, rent – 30% | 328,990 | 27,416 | ha | PhP | PhP/yr | $/yr | ||||
| 1 | Other services – 20% | 219,327 | 18,277 | 100 | 7,500 | 750,000 | 15,625 | ||||
| Total working capital | 4,178,536 | 800,485 | |||||||||
| 15) | Total Regulatory Expenses | ||||||||||
| 0.00% | Special Privilege Tax – 1% | of Electricity Revenue | |||||||||
| 0.00% | Special Realty Tax – 1.5% | of Depreciated Project Cost | |||||||||
| 0.01 | DOE 1-94 : 0.01 PhP/kWh sales | PhP/kWh sales | |||||||||
| 16) | Define corporate income tax rate and income tax holiday | ||||||||||
| 30% | Corporate income tax rate (% of taxable income) | ||||||||||
| 0 | Income tax holiday (ITH), years | ||||||||||
| 17) | Expenses not eligible for income tax deduction | sample data | |||||||||
| 0.00% | Profit Sharing, % of IAT | of income after tax | 5.00% | not used | |||||||
| 0 | Social Benefit Fund – Host Community, PhP/month | per month | 10,000 | not used | |||||||
| 18) | Calculation of Working Capital Needs (WCN) | ||||||||||
| 3.00 | Cash needed for operations (+) | months of expenses | |||||||||
| 1.00 | Customers / Receivables (+) | months of revenue | |||||||||
| 2.00 | Stocks / Inventory (+) | months of fuel & chemicals | |||||||||
| 1.00 | Input VAT (+) | months of input VAT | |||||||||
| 1.00 | Output VAT (-) | months of output VAT | |||||||||
| 1.00 | Suppliers / Payables (-) | months of payables | |||||||||
| 19) | 48.00 | Estimate all-in capital cost | check variance | PhP/sqm | sqm/ha | ||||||
| $2 | Initial investment in land (10 PhP/sqm) x (10,000 sqm/ha) | 10,000,000 | 2.000 | ha | 20,000 | - | 1,000 | 10,000 | |||
| $1,400 | Freight on Board = FOB USA = $/kW | 67,200 | 200.000 | MW | 13,440,000 | - | |||||
| Ocean Freight = FRT = 5% x FOB | 5% | 672,000 | - | ||||||||
| Insurance = INS = 1% x FOB | 1% | 134,400 | - | ||||||||
| Cargo, Insurance & Freight = CIF = FOB + FRT + INS | 14,246,400 | - | |||||||||
| Value Added Tax = VAT = 12% x CIF | 12% | 1,709,568 | - | ||||||||
| Customs Duty = (CIF + VAT) x (% Duty) x (1 + % VAT) | 3% | 536,121 | - | ||||||||
| Duty-Paid Landed Cost = DPLC = CIF + VAT + Duty | 16,492,089 | - | |||||||||
| Local Freight Cost = LFC = 3% x CIF | 3% | 427,392 | - | ||||||||
| Delivered Cost at Site = DCS = DPLC + LFC | 16,919,481 | - | |||||||||
| Installation Cost = IC = 5% x FOB | 5% | 672,000 | - | ||||||||
| 1 | Condenser Cooling System, $ | 67,495,440 | $1,406,155 | 67,495 | - | ||||||
| 1 | Transmission Line, $ per km and km length | 18,000,000 | 10.0 | 180,000.00 | - | ||||||
| Total EPC = DCS + IC + T/L | 17,838,975.96 | - | |||||||||
| Contingency (10%) = EPC x 10% | 10% | 1,783,898 | - | ||||||||
| Documentary Stamps (1%) = EPC x 1% = DS | 1% | 178,390 | - | ||||||||
| $2,063 | Total Fixed Assets (EPC + Contingency + DS) | 19,801,263 | - | ||||||||
| Depreciation term (years) | salvage value | 10.00% | 712,845 | 25 | 19,821,263 | - | |||||
| Development costs (developer, modeler) | 1.00% | 198,213 | - | ||||||||
| Other Costs including taxes, contingencies | 12.00% | 2,378,552 | - | ||||||||
| Carbon Emission Registration & Consultancy | - | - | |||||||||
| $268 | Initial investment in capitalized expenses | 3,377,249 | 2,576,764 | - | |||||||
| Amortization term (years) | salvage value | 10.00% | 121,581 | 25 | - | ||||||
| Working Capital: | |||||||||||
| 0.339 | Working capital (adjustments for DSCR = 1.1) | 1.100 | 1.439 | - | - | ||||||
| Total Fuel Costs | 2 | 278,858 | - | ||||||||
| Expenses from lube purchase | 2 | 11,398 | - | ||||||||
| Purchase of chemical materials – 100% | 2 | 15,270 | - | ||||||||
| Utilities (electricity, water) – 150% | 3 | 34,357 | - | ||||||||
| Special Privilege Tax – 1% | 3 | 0 | - | ||||||||
| Special Realty Tax – 1.5% | 3 | 0 | - | ||||||||
| DOE 1-04 (0.01 PhP/kWh sold) | 3 | 3,671 | - | ||||||||
| Maintenance of the installation – 100% | 3 | 274,158 | - | ||||||||
| Personnel expense – 50% | 3 | 137,079 | - | ||||||||
| Land lease, rent – 30% | 1 | 27,416 | - | ||||||||
| $83 | Other services – 20% | 1 | 800,485 | 18,277 | 23,198,512 | - | |||||
| Interest During Construction: | |||||||||||
| Dev’t fees (developer, loan arranger) | 0.25% | 57,996 | - | Year -2 | Year -1 | Year 0 | |||||
| Front end fees (modeler, loan arranger) | 0.25% | 57,996 | - | 33.0% | 33.0% | 34.0% | |||||
| $373 | Commitment fees (bank) | 0.50% | 231,985 | - | 7,655,509 | 7,655,509 | 7,887,494 | ||||
| Interest During Construction (bank) – 36 months | 3.00 | 7.00% | 3,231,553 | 3,579,530 | - | 7,655,509 | 15,311,018 | 23,198,512 | |||
| Amortization term (years) | salvage value | 10.00% | 128,863 | 25 | - | 77,715 | 77,715 | 76,555 | |||
| $2,789 | Total Investment (land, fixed, capitalized expenses, working capital) | 26,778,043 | - | 535,886 | 1,071,771 | 1,623,896 | |||||
| 20) | Taxes, Insurances, Benefits & Regulatory Costs | based on 47.00 PhP/US$ | |||||||||
| Real Property Tax – Land | 1.60% | of land | NOTE: Differentiate between one time, cyclic (every 2 or 5 years) and recurring (annual) | ||||||||
| Real Property Tax – PPE | 1.60% | of fixed assets | and vary the formula in the Main worksheet accordingly. | ||||||||
| Real Property Tax – Buildings | 0.80% | of building | For simplicity in this model, they are assumed to be annual fees to be conservative. | ||||||||
| Land Lease & ROW | 0 | PhP/MT coal | |||||||||
| Property Insurance – PPE | 0.78% | of fixed assets | |||||||||
| Property Insurance – Building | 0.78% | of building | |||||||||
| Business Interruption Insurance | 0.56% | of previous year’s revenue | |||||||||
| of Capital | Special Education Fund – benefits to host community | 1.00% | of land | ||||||||
| 0.277% | SEC Registration & Fees | 74,175 | Securities & Exchange Commission (certificate of registration) | ||||||||
| BIR Registration & Fees | 530 | Bureau of Internal Revenue (registration of TIN, VAT) | |||||||||
| 0.007% | DENR Permits & Fees | 1,874 | Department of Environment & Natural Resources (EIS, ECC) | ||||||||
| Discharge Fee (BOD, TSS) – DENR | 0 | water pollution discharge permit (4 wastes at 600 each) | |||||||||
| 0.028% | EMB Permits & Fees | 7,498 | Environment Management Bureau (air quality) | ||||||||
| NWRB Permits & Fees | 17,417 | National Water Resources Board (water use permit) | |||||||||
| PNRI Permits & Fees | 5,900 | Philippine Nuclear Research Institute (radioactive material license) | |||||||||
| ERC Registration & Fess | 1,500 | Energy Regulatory Commission (certificate of compliance, authority to operate) | |||||||||
| 0.015% | DOLE Permits & Fees | 4,017 | Department of Labor & Employment (permit to operate pressurized vessels) | ||||||||
| DTI Permits & Fees | 0 | Department of Trade & Industry (registration of business name, with SEC now for corporation) | |||||||||
| 0.142% | LGU Registration & Fees | 38,025 | Local government units (barangay, municipal, provincial, regional) | ||||||||
| 0.002% | NTC Registration & Fees | 536 | National Telecommunication Commission (radio station permit) | ||||||||
| BOC Registration & Fees | 5,000 | Bureau of Customs (accreditation and registration) | |||||||||
| PPA Registration & Fees | 1,000 | Philippine Port Authority (permit to operate shore line facilities) | |||||||||
| ATO Registration & Fees | 13,050 | Air Transportation Office (height clearance permit for smoke stack) | |||||||||
| PDEA Registration & Fees | 3,000 | Philippine Drug Enforcement Agency (essential chemicals commodity permit) | |||||||||
| BOI Registration & Fees | 4,500 | Board of Investment (certificate of registration) | |||||||||
| DOE Permits & Fees | 800 | Department of Energy (authority to import, certificate of registration) | |||||||||
| Local Business Taxes (1/2 of 1% of GR) | 0.00% | of gross revenue | |||||||||
| National Franchise Taxes (1/2 of 1% of GR) | 0.00% | of gross revenue | |||||||||
| Total Taxes, Insurances, Benefits & Regulatory Costs | |||||||||||
| 21) | Cost of debt (loan interest) | ||||||||||
| 5.00% | Reference interest rate (Libor or other), % p.a. | 12 | Loan term, years | ||||||||
| 2.00% | Spread, % p.a. | 3.00 | Grace period (construction period), months | ||||||||
| 7.00% | Interest rate of debt, % p.a. | 0 | Loan amortization method (1 = constant principal repayment, 0 = declining balance method) | ||||||||
| 22) | Capital Structure (equity & debt) | ||||||||||
| 15.00% | % to be financed by capital | 30.00% | Equity IRR | ||||||||
| 0.00% | % to be financed by non refundable subsidy | 0.00% | Subsidy | ||||||||
| 7.00% | % to be financed by debt | 70.00% | Debt Interest | ||||||||
| Initial amount of capital | 9.40% | WACC | |||||||||
| 23) | Debt Service Reserve Fund | ||||||||||
| 6 | Months of debt service | ||||||||||
| 4.00% | DSRF Income -interest on Foreign Currency Deposit | ||||||||||
| 7.50% | Withholding Tax on Foreign Currency Deposit | ||||||||||
| 0.30% | DSRF Expense – withholding tax | ||||||||||
| 24) | Equity Structure (shareholder contribution) | ||||||||||
| planned | Annual dividend payable | actual | |||||||||
| 60.00% | Investor 1 | ||||||||||
| 20.00% | Investor 2 | ||||||||||
| 20.00% | Investor 3 | ||||||||||
| 25) | Your done. Now converge the model by pressing ctrl + e | ||||||||||
| 26) | Print the reports as required | ||||||||||
c) Main sheet
| PROJECT FINANCE MODEL | Name | Coal Thermal Plant (CFB) | |||||
| (C) Copyright 2009 by Marcial T. Ocampo (November 2009) | |||||||
| INSTRUCTIONS | 7.5655 | NPV-ROI | 6.1459 | NPV-ROE | 6.2079 | NPV-FC | |
| (This example is in PhP Thousand, except for the unit prices which are in PhP/kWh) | US$/kWh | PhP/kWh | |||||
| Year 0 reflects the starting assumptions, which will be applicable starting in year 1. | 0.1293 | 6.2079 | NPV | IRR | Payback | ||
| Blue cells must be filled out by the user. | NPV-ROI | 0 | (5,852,032) | 11.26% | 8.22 | ||
| Escalate fuel, lubes, tariff and O&M costs? (1=yes, 0=no) | 0 | NPV-ROE | 0 | 355,864 | 15.52% | 8.57 | |
| CALCULATION OF GROSS OPERATING MARGIN | NPV-FC | 1 | (0) | 15.00% | 8.54 | ||
| used | (0.00) | (0) | 15.00% | 8.54 | |||
| Year | 2010 | 2011 | 2012 | ||||
| Days Per Year | 365.24 | 365 | 365 | 366 | |||
| Hours Per Day | 24 | 24 | 24 | 24 | |||
| Plant Operation | 365 | Year | 0 | 1 | 2 | ||
| Overhaul Cycle | 0 | 1 | 2 | ||||
| Capacity Degradation | |||||||
| Normal, % p.a. | 0.50% | 1.0000 | 1.0050 | 1.0100 | |||
| Overhaul, % p.a. | -2.00% | 0.50% | 0.50% | ||||
| Overhaul Cycle, yr | 5 | ||||||
| Recovery, % | 80.00% | ||||||
| 3 | Select Manufacturer/Engine Model: | MW | Heat Rate, Btu / kWh | Efficiency, % | EPC Cost, $/kW | Variable O&M | Fixed O&M |
| 0 | Biomass Landfill Methane Engine Power Plant | 30.000 | 10,077 | 33.86% | 1500 | 0.00187 | 0.242 |
| 0 | Diesel Oil Engine Power Plant | 18.000 | 9,161 | 37.25% | 1300 | 0.00500 | 0.040 |
| 1 | Coal Thermal Plant (CFB) | 200.000 | 10,614 | 32.15% | 1400 | 0.00325 | 0.225 |
| 0 | Bunker Oil Thermal Plant | 300.000 | 11,675 | 29.23% | 991 | 0.00500 | 0.300 |
| 0 | Low Sulfur Fuel Oil Cogen Plant | 500.000 | 4,262 | 80.06% | 650 | 0.00200 | 0.150 |
| 0 | Natural Gas Combined Cycle Gas Turbine Plant | 500.000 | 6,280 | 54.33% | 650 | 0.00200 | 0.150 |
| Used | Coal Thermal Plant (CFB) | 200.000 | 10,614 | 32.15% | 1,400.00 | 0.00325 | 0.225 |
| (1) Own use is mainly condenser cooling pumping power | 14.000 | ||||||
| RC | Plant Rated Capacity, MW | 186.000 | 200.000 | 186.000 | 186.000 | ||
| Gross Revenue (exclusive of VAT) | 8,932,600 | 8,913,542 | ||||
| Less: Output VAT = Gross Revenue / (1+VAT) * VAT (this is remitted to BIR on the next month) | 12.00% | 957,064 | 955,022 | |||
| Net Revenue (goes to Income Statement) | 7,975,536 | 7,958,520 | ||||
| Expenses Subject to Input VAT | ||||||
| Total Fuel Costs | 1,673,151 | 1,677,929 | ||||
| Expenses from lube purchase | 68,389 | 68,585 | ||||
| Purchase of chemical materials – 100% | 91,619 | 91,423 | ||||
| Utilities (electricity, water) – 150% | 137,428 | 137,135 | ||||
| Special Privilege Tax – 1% | 0 | 0 | ||||
| Special Realty Tax – 1.5% | 0 | 0 | ||||
| DOE 1-04 (0.01 PhP/kWh sold) | 14,683 | 14,651 | ||||
| Maintenance of the installation – 100% | 1,096,633 | 1,094,293 | ||||
| Personnel expense – 50% | 548,317 | 547,147 | ||||
| Land lease, rent – 30% | 328,990 | 328,288 | ||||
| Other services – 20% | 219,327 | 218,859 | ||||
| Loan Interest | 1,312,124 | 1,238,774 | ||||
| Total Expenses Subject to Input VAT | 5,490,660 | 5,417,083 | ||||
| Input VAT | 12.00% | 588,285 | 580,402 | |||
| Output VAT to BIR | ||||||
| Output VAT (current liabilities) | 24,329,861 | 957,064 | 955,022 | |||
| Input VAT (current assets) | 12,292,121 | 588,285 | 580,402 | |||
| Net Output VAT to BIR | 368,779 | 374,621 | ||||
| % VAT to BIR ( Net Output VAT / Output VAT) | 50.52% | 61.47% | 60.77% | |||
| TOTAL OPERATING INCOME | 8,932,600 | 8,913,542 |
| Net Output VAT to BIR | 368,779 | 374,621 | ||||
| Taxes, Insurances, Benefits & Regulatory Costs | 0.00% | 0 | 571,450 | 499,054 | ||
| DSRF Expense | 0.30% | 0 | 3,540 | 3,540 | ||
| total working capital | ||||||
| TOTAL OPERATING EXPENSE | 800,485 | 5,122,306 | 5,055,524 | |||
| Annual increase | 0.09% | -1.3% | ||||
| GROSS OPERATING MARGIN | 3,810,295 | 3,858,018 |
| Calculation of Working Capital Needs (WCN): | ||||||
| Cash needed for operations (+) | 3.00 | months of expenses | 449,265 | 448,307 | ||
| Customers / Receivables (+) | 1.00 | months of revenue | 744,383 | 742,795 | ||
| Stocks / Inventory (+) | 2.00 | months of fuel & chemicals | 305,526 | 306,323 | ||
| Input VAT (+) | 1.00 | months of input VAT | 49,024 | 48,367 | ||
| Output VAT (-) | 1.00 | months of output VAT | 79,755 | 79,585 | ||
| Suppliers / Payables (-) | 1.00 | months of payables | 198,456 | 198,757 | ||
| WCN | 14.08% | % of operating income | 1,269,987 | 1,269,987 | 1,267,449 |
| BALANCE SHEET BEFORE DIVIDEND PAYMENT | |||||
| In ’000 PhP | Year | 0 | 1 | ||
| Cash needed for operations | 0 | 449,265 | |||
| Additional cash (if negative, it would represent additional debt) | 0 | -280,143 | |||
| Receivables / Customers | 0 | 744,383 | |||
| Stocks / Inventory | 0 | 305,526 | |||
| Input VAT (current assets) | 0 | 49,024 | |||
| Land | 20,000 | 20,000 | |||
| Fixed assets (net) | 19,801,263 | 19,088,418 | |||
| Capitalized expenses (net) | 3,377,249 | 3,255,668 | |||
| Capitalized IDC (net) | 3,579,530 | 3,450,667 | |||
| Total assets | 26,778,043 | 27,082,809 | |||
| Output VAT (current liabilities) | 0 | 79,755 | |||
| Suppliers / Payables | 0 | 198,456 | |||
| Debt | 18,744,630 | 17,696,768 | |||
| Shareholder’s Advances | |||||
| Current year profit after tax | 0 | 1,074,417 | |||
| Accumulated reserves | 0 | 0 | |||
| Subsidy | 0 | 0 | |||
| Capital | 8,033,413 | 8,033,413 | |||
| Total liabilities and net worth | 26,778,043 | 27,082,809 | |||
| CASH FLOW STATEMENT | Year | 0 | 1 | 2 | ||
| OPERATIONS | ||||||
| Net Income (after tax) | 0 | 1,074,417 | 1,159,168 | |||
| Add: Depreciation & Amortization | 0 | 963,290 | 963,290 | |||
| (Increase) / Decrease in Receivables | 0 | -744,383 | 1,588 | |||
| (Increase) / Decrease in Inventories | 0 | -305,526 | -796 | |||
| (Increase) / Decrease in Input VAT Credit | 0 | -49,024 | 657 | |||
| Increase / (Decrease) in Output VAT Payable | 0 | 79,755 | -170 | |||
| Increase / (Decrease) in Accounts Payable | 0 | 198,456 | 301 | |||
| Net Cash flow from Operations | 0 | 1,216,985 | 2,124,037 | |||
| INVESTMENTS | ||||||
| Additions to PP&E | 19,801,263 | -19,801,263 | 0 | 0 | ||
| Additions to Capitalized Expenses | 3,377,249 | -3,377,249 | 0 | 0 | ||
| Additions to Capitalized IDC | 3,579,530 | -3,579,530 | 0 | 0 | ||
| Additions to Land | 20,000 | -20,000 | 0 | 0 | ||
| Net Cash flow Used for Investments | 26,778,043 | -26,778,043 | 0 | 0 | ||
| Cash flow before Financing | -26,778,043 | 1,216,985 | 2,124,037 | |||
| FINANCING | ||||||
| Increase (Decrease) in Shareholder Advances | 0 | 0 | 0 | |||
| Increase (Decrease) in Long-term Debt | 18,744,630 | 18,744,630 | -1,047,862 | -1,121,212 | ||
| Increase (Decrease) in Subsidy | 0 | 0 | 0 | 0 | ||
| Increase (Decrease) in Capital Stock | 8,033,413 | 8,033,413 | 0 | 0 | ||
| Net Cash flow from Financing | 26,778,043 | 26,778,043 | -1,047,862 | -1,121,212 | ||
| NET CASH FLOW | 0 | 169,122 | 1,002,824 | |||
| Add: Beginning Cash Balance | 0 | 169,122 | ||||
| ENDING CASH BALANCE | 0.00 | 169,122 | 1,171,947 |
| Levelized Price and Generation Cost of Electricity | Year | 0 | 1 | 2 | ||
| Discounting Rate, % p.a. | 15.00% | 48.00 | NPV | |||
| Electricity sales | MWh | $/kWh | PhP/kWh | 9,422,001 | 1,468,278 | 1,465,146 |
| TOTAL OPERATING INCOME (levelized price) | 000 PhP | 0.1267 | 6.0837 | 57,320,849 | 8,932,600 | 8,913,542 |
| Total Fuel Costs | 000 PhP | 0.0238 | 1.1416 | 10,755,700 | 1,673,151 | 1,677,929 |
| Expenses from lube purchase | 000 PhP | 0.0010 | 0.0467 | 439,635 | 68,389 | 68,585 |
| Purchase of chemical materials – 100% | 000 PhP | 0.0013 | 0.0624 | 587,921 | 91,619 | 91,423 |
| Utilities (electricity, water) – 150% | 000 PhP | 0.0019 | 0.0936 | 881,881 | 137,428 | 137,135 |
| DOE 1-04 (0.01 PhP/kWh sold) | 000 PhP | 0.0002 | 0.0100 | 94,220 | 14,683 | 14,651 |
| Net Output VAT to BIR | 000 PhP | 0.0060 | 0.2875 | 2,708,483 | 368,779 | 374,621 |
| Maintenance of the installation – 100% | 000 PhP | 0.0156 | 0.7469 | 7,037,138 | 1,096,633 | 1,094,293 |
| Personnel expense – 50% | 000 PhP | 0.0078 | 0.3734 | 3,518,569 | 548,317 | 547,147 |
| Land lease, rent – 30% | 000 PhP | 0.0047 | 0.2241 | 2,111,141 | 328,990 | 328,288 |
| Other services – 20% | 000 PhP | 0.0031 | 0.1494 | 1,407,428 | 219,327 | 218,859 |
| Taxes, Insurances, Benefits & Regulatory Costs | 000 PhP | 0.0064 | 0.3096 | 2,916,768 | 571,450 | 499,054 |
| DSRF Expense | 000 PhP | 0.0000 | 0.0020 | 19,189 | 3,540 | 3,540 |
| - Depreciation & amortization | 000 PhP | 0.0138 | 0.6609 | 6,226,847 | 963,290 | 963,290 |
| - Interest | 000 PhP | 0.0115 | 0.5528 | 5,208,038 | 1,312,124 | 1,238,774 |
| - Income tax | 000 PhP | 0.0089 | 0.4269 | 4,022,367 | 460,464 | 496,786 |
| Total Generation Cost | 0.1060 | 5.0876 | 47,935,325 | 7,858,184 | 7,754,374 | |
| Net Profit after tax | 0.0208 | 0.9961 | 9,385,524 | 1,074,416.95 | 1,159,168.06 |
2 Responses to “New Best Entrant Project Finance Model with VAT – landfill, diesel, coal, oil, natgas”
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January 12th, 2011 at 5:48 pm
howdy – nice blog, just window shopping some blogs, seems a pretty nice platform you are utilising. I’m currently using WordPress
November 10th, 2011 at 12:26 pm
Loodgieter Friesland…
[...]New Best Entrant Project Finance Model with VAT – landfill, diesel, coal, oil, natgas | Energy Technology Expert[...]…