Lesson 1Tax assumptions: corporate tax, VAT treatment, withholding, tax holiday and loss carryforward rulesThis section sets tax assumptions for corporate income tax, VAT, withholding taxes, tax holidays, and loss carryforwards in Zambia, showing how they affect project cash flows, equity returns, and lender covenant calculations.
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 profileThis section sets debt assumptions, including tenor, interest rate base, margins, fees, grace periods, and amortization profile, and shows how these choices affect DSCR, LLCR, and equity returns in the model for Zambian projects.
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, commissioningThis section defines the construction schedule, from notice to proceed to mechanical completion and commercial operation in Zambia, and shows how to model milestones, S-curves, and time-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 conventionsThis section explains how to model inflation in Zambia, select nominal or real discount rates, and apply WACC consistently, so valuation, tariffs, and debt metrics remain coherent across the project finance model 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 availabilityThis section defines key technical parameters for a 50 MW solar PV plant in Zambia, including DC and AC nameplate capacity, system losses, degradation, and availability, ensuring realistic energy yield and performance projections.
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 sizingThis section defines equity structure and timing, including sponsor equity, bridge financing, reserve accounts, and DSRA sizing, and explains how equity injections interact with debt drawdowns and distributions in Zambian financing.
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, contingenciesThis section breaks down EPC and owner’s capital costs into detailed categories, including modules, inverters, mounting, civil works, grid connection, soft costs, and contingencies, and explains how to structure them in the model for Zambia.
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 escalationThis section sets operating cost assumptions, including fixed and variable O&M, insurance, land lease, and other recurring costs in Zambia, and explains how to 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 assumptionsThis section defines project life, depreciation methods, and residual value, explaining how technical life, PPA term, and accounting rules in Zambia interact and how they influence taxes, valuation, and refinancing options.
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 inputsThis section shows how to calculate capacity factor using irradiance data from Zambian sources, tilt and azimuth, tracking configuration, and system losses, and how to translate hourly or monthly profiles into annual net generation.
Solar resource data sources and qualityFixed tilt and azimuth optimisationSingle-axis and dual-axis tracking gainsLosses from shading, soiling, and clippingConverting irradiance to net generation
