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[Music] geez well we're going to look at four things right which are kind of four key drivers um in uh and uh or drivers on metrics in uh in a PF deal we're gonna look at the irr we're going to look at the Tariff now I'm calling it tariff but it's kind of pricing of any kind right I'm going to make reference to Renewables model because um you know it's a single tariff it's pretty straightforward and revenue is you know tariff times generation so it's pretty straightforward to understand but you know not all all PF deals are you know are as are as straightforward um and we're going to look at the ratios by which we mean the debt ratios and we're going to look at Leverage so when we're kind of coming up to if we're working on a bed we're part of a competitive tendering Pro you know project where one or one developer amongst a group who are bidding for a project what do we need a model to to do well what we at this point pre-bid we're going to be generally inputting a Target irr whatever that might be and that's going to vary by country by by sector but what we want our model to do is we want to enter you know input our irr and have the model figure out what the Tariff is so at this stage tariff is an output right and irr is an input now that's not universally true but generally speaking that's how we run it because you know we're we're you know we are are the projects that we're working on we'll have a you know a certain Target irr that we're looking for and that of course can change and as we get closer to the bid and we realize that maybe our pricing is you know not where it needs to be to win this thing you know irr is maybe one of the things that we shifted a little bit but you know as as as other as other inputs change like capex or Opex or yields we want to be able to input those um and then run the model and the model tells us what the Tariff needs to be now generally at this stage uh our debt ratios are also on input because let's say we're getting and again these are generalities there are exceptions but we're generally you know getting some debt sizing metrics from lenders and it might be that you know it's a P90 1.2 or it's a p50 1.3 whatever it might be we're getting we're getting that debt sizing metric as an input and so we're on the model to size the debt based on that input and to tell us what the Leverage is going to be right how much debt what's the debt capacity and so you can see that the model needs to be able to solve a couple of things simultaneously right it needs to be able to figure out the Tariff for a given irr and of course as the model changes the Tariff to reach the irr then the debt size is going to change and so it's kind of you know how are we solving all that simultaneously then we get to bid stage and um that that changes right we've we've you know after the bid goes in right let's say we've been lucky enough to be the successful tenderer well at that point we we've we've fixed the the price here right so so now the Tariff is uh an input because it's not going to change post bit there may be some limited circumstances under which it could be adjusted for example swap rates or whatever but at that point right now the Tariff is fixed the Tariff becomes an input and the irr is going to move around you know let's say we've got some you know our EPC assumptions wrong or they've just you know time moves on and they get updated or they know that we get you know a different sense of what the yield is going to be well the Tariff at this point isn't going to move and and because it's you know we've we've you know we've made our bed as it were so at this point now the irr is going to move around but we haven't yet fixed the debt package so the ratio is still an input and The Leverage is an output then we reach Financial close and we fix the debt package we sign the documents and at that point everything is shifted right we've gone completely to the opposite of where we started because you know tariff is now an input but also leverages an input the amount of debt as an input shall we see um and so the debt Quantum is an input and the drawdown profiles are set and now the ratios are going to be the thing that moves around and so typically when lenders are looking for sensitivities they're often looking for post Financial closed sensitivities right you know where we fix the leverage we fix the Tariff and we run some downside cases we might be running if it's a Renewables deal we might be running like a P99 case to show you what is that extreme downside on the on the on the on the yields and we want to know does the ratio stay above one at that point and so we need the ratios to move around so you can see that the model needs to behave very differently depending on on where we are in the transaction now does that make sense so far um I'm just looking at the chat hello kanjang good to see you here um and uh as that just great to see ubun um bright great to see some familiar names any questions about that so far does that make sense all good okay so let me let me move on and just show you how we do that in the model now I'm not going to you know build a model in front of you and we do do that in our courses and if you want to know um you know dig into how to to build models well you know and more education on that we'll talk about a bit about that at the end in terms of some of the free resources and paid resources that we have so let me just switch to a model all right uh let me just let me just escape from here and let me just shut down [Music]