A financial model’s output determines not only the structure of the project’s financing, but also the

project company’s maximum supportable level of

debt. Performing financial modelling requires a highly specialized skillset. In order to build a financial model, a
developer will require the services of a financial analyst with advanced knowledge of Excel spread sheets, or
alternatively, someone with experience building models in one of the several other sophisticated software tools
designed for this purpose.

Yet the ability to construct the mechanical aspects (e.g., the functions/calculations) of the financial model is
itself not the only or necessarily even the most important key requirement.

It is critical that the developer understand the importance of reliable inputs to the financial model, as well as
the significance of the model’s key outputs from an investor’s perspective. The developer should have a

clear understanding of the probable degree of variation for different inputs, as well as the cause(s) of variation.
Furthermore, a firm grasp of the terms used by investors to describe key outputs from the financial model will

be necessary for the developer to enter into informed negotiations on project financing.