Pivotal180 Newsletter June 2020

By Alison Leckie | July 10, 2020

2020 Quarter 2 Newsletter

Thanks for your interest in Pivotal180!

We are excited to have you as part of our community. We hope our knowledge portal is of value to you. We plan to continue to add content over the coming year, so do stay in touch!

Online Courses – Update

  • Our online Tax Equity course is now available. We have had great feedback.m_v_-ZxQE-mbf9_s-unsplash-roads-infra-1-300x168
  • Our NEW Project Finance & Infrastructure Modeling course will be available in August.We are currently offering this course at a discounted pre-launch price of $650.
  • Additional material has being added to all course or will be within the week. See below.

NEW:-  Incorporating Randomness into Renewable Energy Models 

When building financial forecasts for intermittent renewable energy projects, it is common for analysts to use a single value for the net energy generation assumption for the entire duration of the project. For a wind farm, an equity investor may choose to use a P50 assumption for the base case and then explore downside sensitivities by changing the assumption to P75 or P90.

Once that wind farm gets built, however, the actual performance will not be a single constant for the life of the project. Net generation will vary from year to year, falling within a long-term probability distribution function. The performance in any given year can be thought of as a statistical sample drawn from a forecasted population distribution. So if we want our model to approximate reality – or a range of potential realities – it is a best practice to add a stochastic scenario in which the net generation varies from period to period, based upon random sampling.

Pivotal180 is adding a series of videos to our Renewable Energy Project Finance Modeling Course covering concepts of P-values, one-year vs. long-term distributions, NORMAL functions in Excel, and techniques for including random variation into a financial model. We are also excited to be releasing a video explaining the Measure, Correlate, Predict (MCP) process, which is the foundation of most wind studies.

NEW:-  Live-Streamed Courses

We have postponed all of our in-person public courses until health experts determine that it is safe to convene groups for such purposes.then. In the meantime we our new offering online live streamed public courses.

The live-streamed courses are 100% remote but provide real time interaction with instructors and fellow students. Each course includes:

  • Line-by-line construction of a model, rather than explanations of a pre-constructed template
  • Instructors who review your work as you do it, offering one-on-one assistance as needed
  • Presentation of finance concepts and modeling techniques with time for Q&A
  • Access to our online learning platform for self-paced review and supplemental learning materials
  • 2.5 hour live sessions for 3 days a week for 2 or 3 weeks.. This gives you time to review concepts before the next class or for you to dive deeper into concepts that are covered in the self-paced online course
  • Recordings of each session

Start dates for these sessions are available on our website.

We also offer more personalized workshops by tailoring content to the specific needs of companies or individuals. These programs can be offered for a single session or for multiple sessions extended across several days or weeks. Please contact us at sales@pivotal180.com or via this link if you would like to discuss in more detail.

Lessons added to Renewable Energy Courserawfilm-ihMzQV3lleo-unsplash-windfarm-1

Added since March 1

Chapter 2 – Term Loans

Lessons on Loan Agreements

  • Types of Credit Facilities
  • Recitals and Definitions
  • Reps and Warranties
  • Conditions Precedent
  • Covenants
  • The Waterfall
  •  Events of Default and Remedies
  •  A Nominal vs Effective Interest Rates
  • XIRR and XPNV
  • Amendments, Waivers, and Consents

Chapter 3 – Generation

  • Wind forecasting
  • P-factors and Long Term vs 1-Year Distributions
  • Probabilistic Analysis and Normal Distribution unctions in Excel
  • Random Sampling

Chapter 6 – Operating Costs

  • Operating Costs

Chapter 7 – Construction Costs

  • Construction Costs

Chapter 8 – Cash Waterfall and CADS

  • Waterfall Structure

Chapter 9 – Output Data Tables a

  • Sizing Debt to Multiple Covenants

Chapter 11 – Construction Funding

  • Construction Funding  (intro)
  • Construction Funding  (debt)
  • Engineering, Procurement, Construction (EPC) Agreements.

Chapter 12 – Tax and Depreciation

  • Book and Tax Depreciation
  • Earning Before Tax
  • US Production Tax Credit (PTC)
  • US Investment Tax Credit (ITC)
  • Net Operating Losses Carried Forward
  • Modeling Tax Credits

Chapter 15 – 3-way Statements

  • Introduction to 3-way Statements
  • Building a Balance Sheet and Income Statement
  • Retained Earnings

Chapter 16 – Accounts Payable and Receivable

  • Working Capital
  • Adding Working Capital to Balance Sheet

Chapter 17 – Debt Service Reserve Account (DSRA)

  • DSRA Target Balance and Construction Funding
  • DSRA Funding from Cash Available
  • Debt Service Releases
  • DSRA Overfunding Releases
  • DSRA Lockup and Summary

Lessons Added to Tax Equity andreas-gucklhorn-Ilpf2eUPpUE-unsplash-tax-1-1024x767Added Since Launch 

S731(a) gain,

Summary of Tax Capital Accounts

Quarterly Downloadable Version of a Tax Equity Model with pdf  Description of Changes from Annual Model.

Welcome Our New Team Member – Florentina

Emerging Markets Specialist 

Florentina Mutafungwa is a specialist in government advisory and capacity building in emerging markets. Based in Dar es Salaam, she designs and implements consulting and training programs within the energy and infrastructure sectors in Africa.

Recently added free resources

Upcoming free resources

Scenario &Sensitivity Blog Part 2.       New Sample videos of our current courses.

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