Sound Models Over Hopeless Expectations
PPP financial models are intended to bridge the gap between wishful thinking and responsible acting. After all a financial model is intended to familiarize non-financial users with the basics of project finance and better understand the key parameters which affect the financial viability of a PPP.
As standard practice, at IPFA we start with developing two models for communicating financial results; a graphical model for financial simulations and a numerical model for an initial project analysis at pre-feasibility level of possible PPP options.
IPFA’s numerical financial models are based on the following criteria:
Sources of PPP funding
Sources of PPP funding such as equity provide by the Sponsors, debt provided by banks and specialized institutions, tolls/usage fees from users and subsidies from public authorities.
Financial Evaluations
Financial Evaluations are calculated using nominal values based on real values and escalation rates, defined by the user (inflation rate for costs and indexation rate for tolls and revenues).