Lesson 1Tax assumptions: corporate tax, VAT treatment, withholding, tax holiday and loss carryforward rulesSet tax assumptions for corporate income tax, VAT, withholding taxes, tax holidays, and loss carryforwards, demonstrating their impact on project cash flows, equity returns, and lender covenant computations.
Corporate income tax base and ratesVAT on capex and operating costsWithholding tax on interest and dividendsTax holidays and incentive regimesLoss carryforward and minimum tax rulesLesson 2Debt financing assumptions: tenor, interest rate indexing, margin, grace period, amortization profileDefine debt assumptions including tenor, interest rate base, margins, fees, grace periods, and amortisation schedule, and illustrate their effects on DSCR, LLCR, and equity returns in the model.
Debt sizing approach and leverage limitsInterest rate base, margins, and feesGrace periods and sculpted amortizationCash sweep and prepayment mechanicsRefinancing and repricing scenariosLesson 3Construction schedule and milestones: mobilization, EPC durations, commissioningDefine the construction timeline from notice to proceed to mechanical completion and commercial operation, and model milestones, S-curves, and phased capex and interest during construction.
Key EPC milestones and definitionsTime‑phased capex and S‑curve profilesLinking schedule to IDC calculationsMilestone payments and retentionCOD tests and delay scenariosLesson 4Inflation, discount rate selection (WACC), and real vs nominal modelling conventionsUnderstand modelling inflation, choosing nominal or real discount rates, and applying WACC consistently, ensuring valuation, tariffs, and debt metrics stay aligned across the project timeline.
Building inflation index curvesReal vs nominal cash flow conventionsDeriving pre‑tax and post‑tax WACCCountry risk and risk‑free rate inputsInflation pass‑through in tariffsLesson 5Defining plant technical assumptions: nameplate, losses, degradation, and availabilityEstablish key technical specs for a 50 MW solar PV plant, including DC and AC nameplate capacity, system losses, degradation, and availability, for accurate energy yield and performance forecasts.
DC and AC nameplate sizing choicesSystem loss categories and benchmarksModule and inverter degradation curvesScheduled and forced outage assumptionsNet capacity and net output definitionLesson 6Equity structure and timing: sponsor equity, bridge loans, reserves and DSRA sizingDefine equity structure and timing, covering sponsor equity, bridge finance, reserve accounts, and DSRA sizing, and explain interactions with debt drawdowns and distributions.
Sponsor equity commitments and tranchesEquity bridge loans and repaymentFunding waterfall and drawdown timingDSRA sizing methods and fundingMaintenance and other reserve accountsLesson 7Capital expenditure breakdown: PV modules, inverters, mounting, civil, grid connection, contingenciesBreak down EPC and owner’s costs into modules, inverters, mounting structures, civil works, grid connection, soft costs, and contingencies, and structure them effectively in the model.
PV modules and inverter cost assumptionsMounting structures and tracker costsCivil works and balance of plant itemsGrid connection and substation costsDevelopment fees and owner’s costsContingency and price escalation setupLesson 8Operating cost assumptions: fixed O&M, variable O&M, insurance, land lease, and escalationSet operating cost assumptions for fixed and variable O&M, insurance, land lease, and recurring expenses, and model indexation, step changes, and performance-linked fees.
Fixed O&M scope and cost driversVariable O&M and performance feesInsurance coverage and premium settingLand lease and right‑of‑way costsIndexation formulas and step changesLesson 9Project life, asset depreciation methods, residual value assumptionsDefine project life, depreciation methods, and residual value, showing interactions between technical life, PPA term, and accounting rules, and their effects on taxes, valuation, and refinancing.
Technical life vs PPA and debt tenorTax and accounting depreciation methodsComponent replacement and major overhaulsResidual value and terminal cash flowsImpact on tax shield and valuationLesson 10Capacity factor calculation: axis tilt, tracking, and irradiance inputsCalculate capacity factor using irradiance data, tilt and azimuth, tracking setup, and system losses, converting hourly or monthly profiles into annual net generation.
Solar resource data sources and qualityFixed tilt and azimuth optimizationSingle‑axis and dual‑axis tracking gainsLosses from shading, soiling, and clippingConverting irradiance to net generation
