How the model works
Three layers, kept apart: the deal inputs (one JSON file), a calculation engine of pure functions with no UI, and this interface plus the Excel export. Nothing is calculated by an AI.
Calculation order
- Timeline. Semi-annual periods ending 30 June and 31 December, from financial close to PPA expiry. Australian financial year (July–June).
- Operations. Energy = MW × 8,760 × P50 capacity factor × availability × degradation. Revenue = energy × PPA price, indexed to CPI in annual steps from financial close. Opex is indexed the same way. Annual figures are split 50/50 between the two semesters.
- Debt sizing. CFADS (pre-tax) is discounted at the all-in rate over the debt tenor. Capacity at the target DSCR = PV of CFADS ÷ target DSCR. With "lower of" sizing, the debt is the lower of that capacity and maximum gearing × capex.
- Construction. Capex follows the drawdown profile; debt is drawn pro rata at the effective gearing. Equity pays its share of capex plus IDC, commitment fee and the upfront fee.
- Repayment. Sculpted: debt service in each period = CFADS ÷ the constant DSCR that repays the debt exactly at maturity (PV of CFADS ÷ debt). Annuity and linear profiles are also available.
- Tax. Straight-line depreciation of the total project cost from COD; taxable income = EBITDA − depreciation − interest; losses carried forward; 30% corporate tax.
- Ratios. DSCR pre- and post-tax per period, 12-month historic DSCR (tested from the second calculation date), LLCR and PLCR from a backward PV recursion.
- DSRA and waterfall. DSRA target = next 6 months of debt service, funded by equity at COD, topped up from cash flow and released when the target falls. Distributions are blocked during lock-up or while the DSRA is short; trapped cash is released once the test is passed again.
- Equity returns. Equity IRR on semi-annual flows (contributions, DSRA funding, distributions), annualised as (1 + IRR)² − 1. No terminal value after the PPA.
Random deals
A generated deal draws a fictional Australian solar project from realistic ranges: location and capacity factor, capacity (50–400 MW), capex of AUD 1.15–1.45m per MW, opex, 15–20 year PPA (CPI-indexed or flat), margin, fees, gearing (65–80%) and target DSCR (1.25–1.40x). The debt is then sized like a lender would: the lowest of maximum gearing, the amount sculpted at the target DSCR, and the amount that keeps the minimum post-tax DSCR 0.05x above lock-up, rounded down to AUD 0.5m. The PPA price is the lowest price that gives the sponsor its target equity IRR (5.5–8.5%). The same deal number always gives the same deal.
Choices where the term sheet is silent
- Sculpting follows the term sheet on pre-tax CFADS. The post-tax DSCR is shown next to it, because tax can push it below the sculpting target once tax losses run out.
- The DSRA is funded by a separate equity contribution at COD, outside the sources and uses at financial close.
- Interest is calculated as balance × annual rate ÷ 2 (no day count).
How it is tested
- Golden tests: 21 reference values recomputed independently from the Coolabah term sheet (IDC, fees, FY30 EBITDA, sculpted DSCR 1.475x, LLCR, PLCR, IRR…).
- 300 random deals per test run: each one must pass every integrity check, respect its own gearing and DSCR terms, and state in its term sheet the numbers the model uses.
- The Excel export is recalculated by an independent spreadsheet engine and must match the web app on every reconciled output.
Not in this version
Interest rate hedging, agency fees, maintenance reserve, cash sweep, P90 / P99 sizing, margin step-ups, multiple tranches and terminal value.