SMART TASK 4

OF
PROJECT FINANCE
By
(VARDHAN CONSULTING ENGINEERS)

SUBMITTED BY-
DEVESH BHATT
EMAIL ID- deveshbhatt100@gmail.com
(SCHOOL OF MANAGEMENT STUDIES)
PUNJABI UNIVERSITY, PATIALA
(2019-21)
Introduction

Techvardhan Energy Pvt. Ltd (Any Company) “CLIENT” has signed a long term FSA with a large industrial
player for supplying refined pyrolysis oil of 10,000 LPD at a rate of Rs. 15 per Litre. They want to set up a
20 TPD pyrolysis plant near Pune MH. This financial model report is the details in terms of the work plan
agreed between the parties. This report describes in detail the financial model that has been developed
for the assignment that reflects the selected financial situation or This report is based on the Model
Parameter which are given in case, and the structure of this model and report is totally based on the
report which is provided as the base framework for the model.

Objectives of model

The objective of the model is to establish what is required from a financial perspective, to accommodate
the supplying refined pyrolysis oil of 10,000 LPD at a rate of Rs. 15 per Litre. They want to set up a 20
TPD pyrolysis plant near Pune MH. The model establishes the financial viability of the various 20 TPD
pyrolysis plant options identified under the sets of assumptions described below as ‘cases’. Where the
case is not shown to be viable, measures have been identified and modelled to improve the viability.
Viability is measured in terms of whole-life cycle cash flows in the form of a project Internal Rate of
Return (IRR), as well as a minimum Debt Service Cover Ratio in the cases where there is debt.

Structure of model

Introduction

The model has been constructed on an electronic spreadsheet using Microsoft Excel. It comprises cash-
flows over a 25-month. The total model term will, therefore, be twenty years. The cash flows have a
timing profile, with forecasted costs recorded in the year in which they are planned to occur. These
costs have been escalated to take inflation into account. The model comprises several spreadsheets
each with the same annual timeline. All numbers are in INR form.

Case

Techvardhan Energy Pvt. Ltd (Any Company) “CLIENT” has signed a long term FSA with a large industrial
player for supplying refined pyrolysis oil of 10,000 LPD at a rate of Rs. 15 per Litre. They want to set up a
20 TPD pyrolysis plant near Pune MH.

The expected CapEx is Rs. 10 Crore and OpEx is Rs. 2 Crore / per annum for the whole project. They are
seeking a non-recourse debt (project financing) with 70:30 as D/E ratio from leading commercial banks
in India as a 12 years term loan.

1. Analysis

COST SHEET