Africa-Based Renewables Fund

Mazars assisted a renewables fund client to standardise and future-proof the project financial modelling template for its renewables project portfolio (for both pre-FC and operational projects) and developed the fund level model in which the results from updated project models are aggregated and fund level metrics and valuations are calculated.

Client background

At the time of engagement, the client’s portfolio had grown to 12+ existing investments in hydro-electricity, PV solar, and biomass projects in a number of African countries, and with a number of projects also in pre-construction development phase. The financial modelling for these was not consistent and the client required standardisation.

Our Role

The Fund appointed Mazars to develop a new financial model template (the “Template Project Model”). These were designed be used by the various asset investment managers, and post-construction to be handed over to the management accountancy team, as well as be used in to lenders and potential investors.

In addition, the Fund required a new portfolio financial model (the “Portfolio Model”) to assess the portfolio on an aggregate level and to evaluate the returns from the Portfolio, taking into account management costs and fees and carried interest. The new Asset Model would provide project specific financial forecasts is standard form as input to the Portfolio Model.

Project outcomes

Template Project Model:

• Used to generate Individual Project Models;
• Based on a sample model provided by the client to be adapted to have multiple uses throughout the lifecycle of each Project;
• At feasibility stage, it was used to evaluate the return of individual Projects on a standalone basis through to Financial Close;
• At operational stage, it was used for ongoing evaluation of operations at the Project level; and
• The Model was capable of generating financial forecasts and associated analysis for the relevant Project, and also could be used as a monitoring tool, with functionality whereby forecast periodic results can be reliably progressively replaced by historic actuals.

Portfolio Model:

• Used for the evaluation of the financial forecasts of the Portfolio on an aggregate level and of the financial returns to the client from the Portfolio; and
• Capable of being updated with financial forecasts for the Portfolio as derived from the results of periodic updates of the Individual Project Models (whether for existing projects, development projects or hypothetical future projects).