Project Finance Modeling: Cash Flow Waterfall, DSCR & Debt Sculpting

What you'll build

What you will be able to do

Each lab ends with a concrete result that you build yourself and the checker confirms, cell by cell.

• Complete the construction budget of the 48 MW Northgale Wind farm and split its funding between senior debt and sponsor equity.
• Build 15 years of cash flow available for debt service (CFADS) from production, the indexed PPA price, escalating opex and a simplified tax.
• Size the senior debt the way lenders do: the present value of the debt service that CFADS can cover at the target DSCR, capped by maximum gearing.
• Build the sculpted repayment schedule over the 13-year tenor and check that it repays the debt exactly.
• The sponsor asks for a simple annuity instead of sculpting. You test it the lenders' way: DSCR every year, minimum DSCR and the loan life coverage ratio (LLCR).
• Run the actual cash of a windy and a calm year through the waterfall: senior debt service first, then the debt service reserve, then the lock-up test, and only then distributions to the sponsor.
• Build the sponsor's cash flows, measure the equity IRR and NPV and compare them with the unlevered project IRR.
• Stress the base case the way lenders do and chart how far the minimum DSCR falls towards the lock-up covenant.