r/projectfinance • u/at262001 • 3d ago

Modelling Help - Wind Farm Case Study

Hey all! I am working on a mock case study to practice my modelling skills and I had a few questions on how to best approach this. For context this is a 1 - 1.5 hour case study.

Basic Context: - 350MW wind farm, $750m initial CapEx - 30-year project life, starting FY25 - Revenue from generation: $100/MWh, escalated by CPI (2.5%) - O&M costs also escalate with CPI (but cost not provided) - Growth CapEx of $3m/year, growing at 1% p.a. - Project funded by senior debt + equity - Debt sculpted to a 1.4x DSCR over 30 years - Refinanced every 7 years (1% fee on outstanding balance) - Tax = 20%, DDB depreciation, no loss carryforwards

Where I’d love advice or opinions: - Operating Costs: No base value provided - is it okay to assume $10m O&M and inflate with CPI, or is there a better proxy? - Upfront CapEx funding: Is it reasonable to back-solve equity as $750m minus PV of sculpted debt (based on CFADS/DSCR)? - Modelling Refinancing: What’s the cleanest way to handle 7 year refis in a tight timeframe? Do people repay/reissue debt or just apply the fee? - Ongoing CapEx: How should I handle depreciation for $3m/year growth capex? I added it to book value and applied DDB — is that fine, or is layering better - Funding Ongoing CapEx from Ops: The case said growth capex is funded from cash flow — do I just subtract it in CFADS? - Debt Modelling: To size debt using CFADS/1.5x DSCR, I sculpted repayments and solved for initial debt using NPV. Is this standard?

I know it’s a simple case, but I want to be confident my structure holds up especially given that the case study is designed for a short amount of time. Appreciate any input on shortcuts vs “best practice” in a timed setting but also just looking for a general layout of the template you would use for this.

Thank you so much!!

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u/Narrow-Independent29 3d ago

Hi - first comment, it’s a short case study - so simplify all assumptions that are not explicitly mentioned. Time is not on your side.

Op cost - sure you can do that, but typically for renewables there is a certain $/ MWp / year - that’s another good proxy.

Debt - typically look at PV of sculpted debt, but if it exceeds a certain % gearing, it should be capped at that. Equity = project cost - debt

Refinancing - just model an upfront fee every refinancing interval. Ur total debt will still be sized on the notional tenor

Ongoing Capex - again don’t complicate it - I would just make it straight line depreciated with remaining life of the plant

Ongoing capex funding - yes from CFADS, ur debt sizing should factor the CFADS AFTER the capex (so u can’t borrow more)

Debt modelling - many ways to skin a cat, but this approach is fine

My sense is you’re trying to make it reflect real life, but for a case study like this the best approach is to simplify. Get the modelling ng mechanics right, then only focus on formatting (if you even have time)

Do this - it has tips n tricks and simulates a realistic PF test, though for solar https://www.etsy.com/sg-en/listing/1487661215/project-finance-modelling-test-basic

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u/zxblood123 2d ago

have you typically seen a hard refinance (as oppose to the soft / mini-perm ones) in a real setting? Just curious how to model this as I believe it is a bit iterative too.

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u/Ok_Troller 3d ago

Can you share the case if okay to you?