Your Financial Model is an essential element of your application

Preparing your Financial Model

The financial model should be prepared in USD and in MS Excel or equivalent software. Any historical data available should be included (from previous years/months), and the model should clearly demonstrate:

  • the current financial situation of your project (invested and disbursed amounts)
  • all future investments already committed, and
  • the Investment Proposal presented in your Project Proposal (for additional investment).

The assumptions regarding revenue, operating expenses, planned capital expenditures, taxes and any other costs or sources of revenue and financing should be clearly stated.

The time frame should cover the main planned milestones of the project, any planned growth periods and the expected maturity of the Investment Proposal, as applicable. The model should ideally present the calculation of financial indicators such as internal rate of return (IRR), return on capital invested/expenditure (ROCE), payback period, point of break even, annual debt service coverage ratio (DSCR) and interest coverage ratio (ICR) (both based on EBITDA).

At GVE, we provide alternative energy solutions for residential, commercial, and most importantly, rural off-grid communities. We started out as undergraduate students with no capital and no form of experience. PFAN has helped us to get a grasp of business development, business management, and most especially, structuring a bankable project that can help attract a significant level of financing. Our successes have been through the tremendous support we’ve gotten from the PFAN network over the years, and we are very grateful to PFAN for this support.

- Ifeanyi Orajaka Founder/Ceo, Green Village Electricity