Article
Most project finance content is about structure. This series is about the build.
Over the next five weeks I'm taking one deliberately ordinary solar deal through the mechanics a lender-ready model has to get right, one mechanic per post.
The deal: Riverbend Solar. Financial close 1 September 2027; commercial operation 1 March 2029, after an 18-month build.
50 MW AC / 62.5 MWp single-axis tracker plant in the Northern Cape, its modules degrading as their warranty allows: 1% in year 1, then 0.4% a year.
A 20-year wheeled PPA with an industrial manufacturer at R0.95/kWh (2029 rand), rising with CPI: 42% below the Eskom credit the offtaker would otherwise earn on each kWh.
R650m capital cost, R13.0m per MW AC.
One senior bank loan: 15 years, ZARONIA plus 285 bps, 75% swapped (11.04% all-in), sized at the lowest of the lender's 75% maximum gearing, 1.30x DSCR on P50 and 1.20x on one-year P90.
Section 12B inside a standalone SPV. No DFI, no mezzanine, no HoldCo.
Where it lands:
How long it takes:
| One full engine run | 0.61 seconds |
|---|---|
| 12 lender stresses and 2 breakevens | 1.0 seconds |
| The workbook and every document, each read back against the model | 53 seconds |
Speed only matters because the mechanics underneath are right. That's the series:
- Energy, price and revenue
- Construction, IDC and sources and uses
- Sizing the loan
- Interest and the swap
- The cash flow waterfall and reserves
- Tax: s12B and the assessed loss
- Lender stress on the financial-close debt
- Checking the model
- One run to the full document set
Next: from sunlight to CFADS, line by line.
Riverbend Solar is an illustrative case study: a fictional deal with no real counterparty.