Principles of Project Finance

This chapter reviews the main building blocks of information and assumptions

used for projections that are assembled to create inputs for a project financial

model (cf. §12.1, §12.3–§12.6), the basic structure of, and outputs produced by,

the model (cf. §12.2), and how the project and the financial model are affected by

accounting and taxation issues (cf. §12.7).

The chapter also covers how the financial model is used by investors to evalu-

ate their returns (cf. §12.8) and by lenders to calculate the level of cover for their

loans (cf. §12.9) and to create a Base Case (cf. §12.10) and sensitivity calculations

(cf. §12.11).

The ways in which investors establish ...