International Transmission System Developer
Project Finance Model Build

The Challenge

The client, a startup backed by a public energy transmission provider, had recently begun considering offshore transmission projects. Their team was exploring opportunities from a technical point of view but lacked a financial decision-making tool.

They had previously relied on investment banks to build models on a project-by-project basis, which led to inconsistent outputs and prohibitive expenses. A flexible yet consistent model was required to assess investment opportunities across multiple jurisdictions with varying technologies and complex regulatory pricing frameworks.

The Solution

We reviewed all models built to date and spoke to the client about the challenges they had faced in their operation. Time was spent with the engineering team to understand the proposed infrastructure types, the technologies behind them, and their expectations for the industry’s future evolution. To ensure accuracy, external experts were consulted to reflect changes in the financing of infrastructure projects. Additionally, leadership was consulted to confirm group investment criteria and identify potential regulatory complexities. This enabled us to build a project finance structure with sufficient flexibility to assess projects that straddle multiple regulatory frameworks.

We designed a template model to slot seamlessly into a consolidated forecast model, which was, in turn, integrated with the parent company group model, saving days of consolidation time in each reporting period.

The Outcome

The client commissioned an external review of the model to gauge the risk of error, validity of assumptions, and appropriateness of the overall structure. 

We were delighted to hear that the model passed the review with flying colours, with the reviewers commenting that it was the best model the reviewer had seen. The client has since used the tool to assess and price various projects, ultimately shaping their long-term investment strategy.

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George Pavlovic ACA
Director, Financial Modelling
Aleksandra Pavlovic FCCA
Director, Financial Modelling

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