This is a simple project finance model, which is gonna help us understand the basics of building a three statement integrated model for project finance. At the very top here, we have our timeline, which consists of three years of the construction phase as well as another five years during the operational phase. We also have a very first section with our financing assumptions and a second section here with our operational assumptions.

So the first thing we need to do to build our sources and uses of funds is calculate the equity financing percentage of setup costs. Now we are provided the debt financing percentage of 55%. So to compute our equity financing percentage, we simply take one minus the debt financing, and that gives us 45%.

Now we can take a look at our uses of funds, starting with our CapEx assumption, which is 100 each of the three construction years, and we can copy that right? Next we're gonna add our other costs. These are typically soft costs like fees, and any costs that are needed to get the project started.

We're gonna link that up to our other setup cost assumption of 20, and we're gonna copy that to the right. Now we have two more lines here. One is for working capital and another one is for interest expense. We cannot build these lines yet. So for now we're gonna skip these lines and I'm gonna fill these cells in yellow so we know to come back to these lines later. So now I can compute my total spend or my total uses as the sum of these four lines above, and we can copy that, right? And now let's take a look at my sources of funds, starting with my debt issued. So I can take my total spend and multiply times my debt financing assumption at the very top, and that will be 55%. We lock that in and we copy that, right? My common stock issued, or my equity financing, is gonna be calculated in a very similar way. We take the total spend and we multiply times our equity financing assumption of 45%.

And we copy that right. Now this model is gonna allow us to keep the debt to equity ratio consistent or constant, which is something that banks typically require. So we can now compute our total sources of funds or total financing as the simple sum of our debt And and equity financing. We can copy that, right? And here we have our sources and uses of funds. Of course, we gotta work on the working capital and the interest expense later.