Wind Power Valuation Model

8/8/2019 Wind Power Valuation Model

http://slidepdf.com/reader/full/wind-power-valuation-model 1/20

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



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



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%



17 18 19 20

$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





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



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

$- $- $- $- $-





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







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



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!







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



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!



$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



17 18 19 20

$2,829,613.22 $2,872,057.42 $2,915,138.28 $2,958,865.36


$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 $-

$- $- $- $-


$4,343,977.37 $4,409,137.03 $4,475,274.08 $4,542,403.20

$- $- $- $-


$82,050,000.00 $82,050,000.00 $82,050,000.00 $82,050,000.00


17 18 19 20


0.2 0.18 0.16 0.15






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





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





$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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Wind Power Valuation Model

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