Solvanta Renewables Business Plan › Section 17 › Financial Plan

Modelling approach and integrity

The projections below derive from an integrated three-statement
financial model built independently from the sponsor brief. The
sponsor’s headline revenue, EBITDA, installed capacity and energy
volumes are preserved exactly in every year; everything below EBITDA is
re-derived from first principles, depreciation on a commissioned-asset
pool basis, interest split between capitalised construction-period
interest (IDC) and cash interest on operational debt, and South African
corporate income tax at 27% applying the assessed-loss carry-forward
with the 80%-of-taxable-income utilisation limitation. The balance sheet
is asserted to tie to zero in every projection year. Wheeled third-party
energy is recognised on a net (agency) basis under IFRS 15.

Key assumptions

Projected profit and loss

The earnings profile is the canonical growth-IPP shape: EBITDA turns
positive in FY2028 and compounds to R2.1 billion, but net profit remains
negative in every plan year because depreciation and cash interest scale
with the commissioned asset base faster than the EBITDA of a fleet that
is, in each year, substantially mid-construction. The cumulative
assessed loss of approximately R1.19 billion at FY2031 shelters early
post-plan profits; on the sponsor trajectory, accounting profitability
arrives in FY2033 as the full fleet completes operating years without
matching construction interest.

Projected balance sheet

Net PP&E grows to R31.7 billion as the programme commissions,
funded by R20.5 billion of senior debt, R4.1 billion of mezzanine and
R9.5 billion of contributed equity, less cumulative losses of R1.19
billion. The balance sheet ties to zero in every year under a hard model
assertion. Net debt to (in-place) EBITDA peaks at approximately 11.6x in
FY2031, a figure that looks alarming against operating-company norms but
reflects debt raised against a fleet whose full-year earnings arrive in
FY2032; against run-rate EBITDA of approximately R4.0 billion the ratio
is 6.0x, within infrastructure-platform norms though above the 4.5–5.0x
at which investment-grade IPPs typically term out.

Projected cash flow

Operating cash flow turns positive in FY2029 and reaches R1.7 billion
by FY2031, but the investing line dominates throughout: cumulative capex
including IDC of R34.1 billion dwarfs cumulative operating cash flow of
R2.4 billion. The financing architecture, senior debt drawn pro-rata
with construction, equity tranches deployed against milestone gates, and
the mezzanine top-up in FY2031, is engineered to hold minimum free cash
of R350 million in every year while fully funding the build.

Capital programme

Debt profile and service cover

Scenario analysis

Sensitivity analysis

Exit multiple dominates the sensitivity ranking: a 1.5x turn of the
run-rate multiple moves equity IRR by –29 to +17 percentage points, more
than tariff, capex and capacity factor combined. Operationally, realised
tariff is the largest lever management controls, a 10% shortfall against
the modelled R1.31–R1.36/kWh blended tariff (i.e., contracting at
today’s market benchmarks instead of the premium) costs 14.5 points of
IRR. The build schedule ranks fourth: a 12-month slip costs 8.4 points,
principally by delaying the run-rate year against which exit value is
struck.

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