wind power valuation model
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8/8/2019 Wind Power Valuation Model
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modeled by: E.Ozmen for Zorlu Energy Group
* Cells in blue may be adjusted
Financial ParametersGeneral:
Fuel cost escalation rate 0%
inflation rate 1.5% discount rate 10%
project life 20
Depreciation term 20
Finance:
Debt Ratio 70%
Debt $186,200,000.00
Equity $79,800,000.00
Debt interest rate 5.00%
Debt Term 10 E
AVG annual Debt payment $23,931,250.00
Ele
Financial Highlights
AVG gross operating income $39,578,341.43 35%
Average Operating Profit $16,445,705.71 3%
AVG Annual Debt Service (DS) $23,931,250.00 2%
AVG Annual CFD $32,548,150.47 100%
AVG DSCR #VALUE! 30%
Debt payback #VALUE! 6%
EquityPayback #VALUE! 2%
Equity payback(after debt PB) #VALUE! 125%
Net Present Value #VALUE! 40%
IRR- Equity #VALUE! 1%
IRR- assets #VALUE! 1%
75%
Probability Scenarios:
Scenario 1: low Scenario 2: Expected Scenario 3: high
Scenario based on highoperating costs, lowercapacity factor, higher
interest rates
Scenario based on normalassumtions of the model; currentexport price, Avg capacity factor,
and normal interest rates
Scenario based on lowoperating costs, high
capacity factor, and lowinterest rates
$200,000,000.00
$250,000,000.00
Debt/DSCR
Remaining debt DSCR
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0.07
,500.00 0.08
0.09
0.1
0.11
0.12
2% 1,3 1503% 1,4 70
3%1,5
4%1,25
2 13 14 15 16 17 18 19 20
Cumulative CF
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Project finance model
Wind Power Project analysis
gross operating margin
1)operating income
Year 0 1
Tariff for Sales $/kwh $0.10 $0.1015000
Annual tariff increase 0% 0%
Electricity volume of sales (kwh) 337,260,000.00 337,260,000.00 inflation 1.5% 1.5%
Income from sales $34,231,890.00
Total operating income $34,231,890.00
2)Operating expenses 100%
0 1
Maintenance of WPG 666620 $676,619.30
Mis Maintenance 215900 $219,138.50
insurance 1065350 $1,081,330.25
Leasing and other 249000 $252,735.00
Annual expense increase( inflation) 1.5%
Total Opex $2,196,870.00 $2,229,823.05
Gross operating income $-2,196,870.00 $32,002,066.95
75% 100%
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$0.1288020 $0.1307341 $0.1326951 $0.1346855
0% 0% 0% 0%
337,260,000.00 337,260,000.00 337,260,000.00 337,260,000.001.5% 1.5% 1.5% 1.5%
$43,439,773.68 $44,091,370.28 $44,752,740.84 $45,424,031.95
$43,439,773.68 $44,091,370.28 $44,752,740.84 $45,424,031.95
17 18 19 20
$858,620.11 $871,499.41 $884,571.91 $897,840.48
$278,083.59 $282,254.84 $286,488.67 $290,786.00
$1,372,192.46 $1,392,775.35 $1,413,666.98 $1,434,871.98
$320,717.06 $325,527.82 $330,410.74 $335,366.90
1.5% 1.5% 1.5% 1.5%
$2,829,613.22 $2,872,057.42 $2,915,138.28 $2,958,865.36
$40,610,160.45 $41,219,312.86 $41,837,602.55 $42,465,166.59
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Project finance model
Wind Power Project analysis
Depreciation calculation
Year 0 1
Direct investment in assets $266,000,000.00
Depreciation term 20
Investment in capitalized expenses $7,500,000.00
Amortization term 10Depreciation of assets $13,300,000.00
Amortization of capitalized exp $750,000.00
Total depreciation expense $14,050,000.00
Evolution of fixed assets Year 0 1
Gross Fixed assets $266,000,000.00 $266,000,000.00
accumulized depreciation $13,300,000.00
net fixed assets $266,000,000.00 $252,700,000.00
Gross capitalized expenses $7,500,000.00 $7,500,000.00
accumulated amortization 0 $750,000.00
net capitalized expenses $7,500,000.00 $6,750,000.00
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16 17 18 19 2
$13,300,000.00 $13,300,000.00 $13,300,000.00 $13,300,000.00 $13,300,000.00
$13,300,000.00 $13,300,000.00 $13,300,000.00 $13,300,000.00 $13,300,000.00
16 17 18 19 2
$266,000,000.00 $266,000,000.00 $266,000,000.00 $266,000,000.00 $266,000,000.00
$212,800,000.00 $226,100,000.00 $239,400,000.00 $252,700,000.00 $266,000,000.00
$53,200,000.00 $39,900,000.00 $26,600,000.00 $13,300,000.00 $-
$7,500,000.00 $7,500,000.00 $7,500,000.00 $7,500,000.00 $7,500,000.00
$7,500,000.00 $7,500,000.00 $7,500,000.00 $7,500,000.00 $7,500,000.00
$- $- $- $- $-
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Project finance model
Wind Power Project analysis
Debt service calculation
Year 0
Initial investment+ Capex $273,500,000.00
% financed by capital 30%
% financed by debt 70%
initial Amount of debt $191,450,000.00
Repayment term 10
annual repayment $19,14
Remaining debt $191,450,000.00 $172,30
Avg amnt of debt $181,87
Euribor 3.00%
spread 2.00%
Debt interest rate 5.00%
Year 0
Amount of interest $9,09
Annual Debt Service (principal + i) $239,312,500.00 $28,2
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Project finance model
Wind Power Project analysis
Profit & loss Statement
Year 0 1
Operating income 34,231,890.00 34,745,368.35
operating expense $2,229,823.05 $2,263,270.40
operating margin 32,002,066.95 32,482,097.95
Depreciation $14,050,000.00 $14,050,000.00
interest $9,093,875.00 $8,136,625.00
Profit pre-tax $8,858,191.95 $10,295,472.95
tax rate 20% 20%
income tax $1,771,638.39 $2,059,094.59
Net profit $7,086,553.56 $8,236,378.36
% increase 16.23%
Cash Flow for Debt Service
Year 0 1
Operating gross margin 32,002,066.95 32,482,097.95
- income tax $1,771,638.39 $2,059,094.59
- increase in WCN 5,134,783.50 77,021.75
WCN as % of income 15% 15%
WCN $5,134,783.50 $5,211,805.25
CALCULATION OF WCN:
Cash needed for opex as % of income 5% 5%
Cash needed for operations $1,711,594.50 $1,737,268.42
recievables as % of Op income 20% 20%
recievables $6,846,378.00 $6,949,073.67
Suppliers as % of operating income 10% 10%
Suppliers $3,423,189.00 $3,474,536.84
Cash flow for Debt Service (CFD) $25,095,645.06 $30,345,981.61
CALCULATION OF DSCR
Year 0 1
CFD $25,095,645.06 $30,345,981.61
Annual Debt Service (DS) #VALUE! #VALUE
DSCR #VALUE! #VALUE
Cash sweep #VALUE! #VALUE
$150 000 000 00
$200,000,000.00
$250,000,000.00
$300,000,000.00
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16 17 18 19 20
### ### ### ### ###
$2,787,796.28 $2,829,613.22 $2,872,057.42 $2,915,138.28 $2,958,865.36
### ### ### ### ###
$14,050,000.00 $14,050,000.00 $14,050,000.00 $14,050,000.00 $14,050,000.00
$- $- $- $- $-
$25,960,010.30 $26,560,160.45 $27,169,312.86 $27,787,602.55 $28,415,166.59
20% 20% 20% 20% 20%
$5,192,002.06 $5,312,032.09 $5,433,862.57 $5,557,520.51 $5,683,033.32
$20,768,008.24 $21,248,128.36 $21,735,450.29 $22,230,082.04 $22,732,133.27
2.33% 2.31% 2.29% 2.28% 2.26%
16 17 18 19 20
### ### ### ### ###
$5,192,002.06 $5,312,032.09 $5,433,862.57 $5,557,520.51 $5,683,033.32
94,871.99 96,295.06 97,739.49 99,205.58 100,693.67
15% 15% 15% 15% 15%
$6,419,670.99 $6,515,966.05 $6,613,705.54 $6,712,911.13 $6,813,604.79
5% 5% 5% 5% 5%
$2,139,890.33 $2,171,988.68 $2,204,568.51 $2,237,637.04 $2,271,201.60
20% 20% 20% 20% 20%
$8,559,561.32 $8,687,954.74 $8,818,274.06 $8,950,548.17 $9,084,806.39
10% 10% 10% 10% 10%
$4,279,780.66 $4,343,977.37 $4,409,137.03 $4,475,274.08 $4,542,403.20
$34,723,136.26 $35,201,833.30 $35,687,710.80 $36,180,876.46 $36,681,439.61
16 17 18 19 20
$34,723,136.26 $35,201,833.30 $35,687,710.80 $36,180,876.46 $36,681,439.61
#VALUE! #VALUE! #VALUE! #VALUE! #VALUE!
#VALUE! #VALUE! #VALUE! #VALUE! #VALUE!
#VALUE! #VALUE! #VALUE! #VALUE! #VALUE!
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Project finance model
Wind Power Project analysis
1) Balance sheet Pre dividend
Year 0
Cash needed for operations $- $2,229,82
additional cash $47,862,500.00 $3,425,09
recievables $- $6,846,37fixed assets $266,000,000.00 $252,700,00
Capitalized expenses $7,500,000.00 $6,750,00
TOTAL ASSETS $321,362,500.00 $271,951,296
Assets to liabilities balance OK OK
Suppliers $3,423,18
Debt $239,312,500.00 $172,305,00
Current year profit $- $7,086,55
accumulated reserves $- $7,086,55
capital $82,050,000.00 $82,050,00
TOTAL LIABILITIES AND NET WORTH $321,362,500.00 $271,951,296
2) Dividends payable
Year 0
CFD $- $25,095,64
Annual DS $- #VA
Cash flow available for dividend $- #VA
accumulated CF for div $- #VA
current year profit $- $7,086,55
accumulated profit $- $7,086,55
accumulated dividends payable $- #VA
annual dividends paid $- #VA
3) Balance sheet after dividend
Year 0
Cash needed for operations $2,229,82
additional cash #VA
recievables $6,846,37fixed assets $266,000,000.00 $252,700,00
Capitalized expenses $7,500,000.00 $6,750,00
TOTAL ASSETS $321,362,500.00 #VA
Suppliers $3,423,18
Debt $239,312,500.00 $172,305,00
accumulated reserves $- #VA
capital $82,050,000.00 $82,050,00
TOTAL LIABILITIES AND NET WORTH $321,362,500.00 #VA
4) Calculation of NPV, IRR, and Payback period
Year 0
Invested Capital $82,050,000.00annual dividends payable $- #VA
Discount rate for NPV 10%
Corresponding discount factor 1
discounted dividends $- #VA
PV of dvidends #VALUE!
NPV of the investment #VALUE!
Investment Schedule $-82,050,000.00 #VA
I t t h d l TOTAL INV $ 321 362 500 00 #VA
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17 18 19 20
$2,829,613.22 $2,872,057.42 $2,915,138.28 $2,958,865.36
$318,440,986.38 $353,856,154.74 $389,771,650.62 $426,194,978.94
$8,687,954.74 $8,818,274.06 $8,950,548.17 $9,084,806.39$39,900,000.00 $26,600,000.00 $13,300,000.00 $-
$- $- $- $-
$369,858,554.34 $392,146,486.22 $414,937,337.07 $438,238,650.69
OK OK OK OK
$4,343,977.37 $4,409,137.03 $4,475,274.08 $4,542,403.20
$- $- $- $-
$21,248,128.36 $21,735,450.29 $22,230,082.04 $22,732,133.27
$262,216,448.61 $283,951,898.90 $306,181,980.94 $328,914,114.22
$82,050,000.00 $82,050,000.00 $82,050,000.00 $82,050,000.00
$369,858,554.34 $392,146,486.22 $414,937,337.07 $438,238,650.69
17 18 19 20
$35,201,833.30 $35,687,710.80 $36,180,876.46 $36,681,439.61
#VALUE! #VALUE! #VALUE! #VALUE!
#VALUE! #VALUE! #VALUE! #VALUE!
#VALUE! #VALUE! #VALUE! #VALUE!
$21,248,128.36 $21,735,450.29 $22,230,082.04 $22,732,133.27
$262,216,448.61 $283,951,898.90 $306,181,980.94 $328,914,114.22
#VALUE! #VALUE! #VALUE! #VALUE!
#VALUE! #VALUE! #VALUE! #VALUE!
17 18 19 20
$2,829,613.22 $2,872,057.42 $2,915,138.28 $2,958,865.36
#VALUE! #VALUE! #VALUE! #VALUE!
$8,687,954.74 $8,818,274.06 $8,950,548.17 $9,084,806.39$39,900,000.00 $26,600,000.00 $13,300,000.00 $-
$- $- $- $-
#VALUE! #VALUE! #VALUE! #VALUE!
$4,343,977.37 $4,409,137.03 $4,475,274.08 $4,542,403.20
$- $- $- $-
#VALUE! #VALUE! #VALUE! #VALUE!
$82,050,000.00 $82,050,000.00 $82,050,000.00 $82,050,000.00
#VALUE! #VALUE! #VALUE! #VALUE!
17 18 19 20
#VALUE! #VALUE! #VALUE! #VALUE!
0.2 0.18 0.16 0.15
#VALUE! #VALUE! #VALUE! #VALUE!
#VALUE! #VALUE! #VALUE! #VALUE!
#VALUE! #VALUE! #VALUE! #VALUE!
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Risk range 20%*enter risk range
$212,800,000.00 $239,400,000.00
$/kwh -20% -10%
$0.0800 -20% $24,486,001.05 $6,987,824.77
$0.0900 -10% $47,700,016.07 $29,994,882.78
$0.1000 0% $72,244,840.24 $53,208,897.80
$0.1100 10% $97,481,648.76 $77,682,370.01
$0.1200 20% $122,718,457.28 $102,919,178.53
$212,800,000.00 $239,400,000.00
Debt % -20% -10%
56% -20% $64,731,263.08 $44,024,761.6863% -10% $68,488,051.66 $48,235,161.58
70% 0% $72,244,840.24 $53,208,897.80
77% 10% $76,605,454.21 $59,587,528.62
84% 20% $82,296,877.34 $65,966,159.44
*Adjust Export price and capacity factor before
*Export price and capacity factor set at .10$ and 35%
$212,800,000.00 $239,400,000.00
Debt -20% -10%56% -20% $1.96 $1.77
63% -10% $1.75 $1.58
70% 0% $1.58 $1.43
77% 10% 1.439 1.299
84% 20% $1.32 $1.19
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INITIAL CAPITAL
$266,000,000.00 $292,600,000.00
0% 10%
$-7,590,058.22 $-19,577,424.60
$12,289,749.50 $-3,251,871.03
$35,503,764.52 $17,798,631.23
$58,717,779.54 $41,012,646.25
$83,119,899.79 $64,226,661.27
*enter initial capital values
INITIAL CAPITAL
$266,000,000.00 $292,600,000.00
0% 10%
$23,318,260.27 $2,611,758.87$28,437,926.00 $10,045,585.02
$35,503,764.52 $17,798,631.23
$42,569,603.03 $27,688,680.49
$51,913,478.56 $41,546,334.37
INITIAL CAPITAL
$266,000,000.00 $292,600,000.00
0% 10%$1.62 $1.49
$1.44 $1.33
$1.30 $1.20
$1.19 $1.09
$1.09 $1.01
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$319,200,000.00
20%
$-29,659,989.10
$-16,151,590.31
$1,313,330.60
$23,307,512.96
$46,521,527.98
$319,200,000.00
20%
$-16,787,009.86$-8,346,755.96
$1,313,330.60
$15,814,462.39
$33,608,176.33
$319,200,000.00
20%$1.38
$1.23
$1.11
$1.02
$0.94
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