MEGAPOWER Solar Business Plan › Section 7 › Financial Plan

This section sets out MEGAPOWER’s full project financial model,
including operating assumptions, capitalisation, projected income
statement, projected balance sheet and projected cash-flow statement
over the 25-year project life. All figures are in nominal ZAR millions
unless otherwise stated.

7.1 Modelling Approach

The financial model has been built bottom-up in line with
international project-finance standards. Revenue and cost lines are
projected at a monthly granularity for the construction period and an
annual granularity for the 25-year operating period. The model uses a
debt-sized capital structure (debt sized to a target minimum DSCR of
1.30x) and produces consistent IFRS-compliant statements together with
key bankability metrics (DSCR, LLCR, PLCR). All inputs are visibly
tagged as assumption, calculation or output.

7.2 Key Macroeconomic Assumptions

7.3 Operating Assumptions

7.4 Capital Cost (Capex)

Project capex of ZAR 1,851 million has been built up bottom-up
against three independent sources: (i) recent EPC quotes for comparable
utility-scale projects in South Africa, (ii) BNEF’s 2025 Q4 cost-bench
database, and (iii) the IRENA 2025 Renewable Power Generation Costs
report. The result is a unit cost of approximately ZAR 14.2 m / MW (DC)
— within the bankable range for projects of this scale in South Africa
today.

Figure 7.1

7.5 Capitalisation & Sources of Funds

The project is capitalised at a senior-debt-to-total ratio of 70%,
structured to deliver a base-case minimum Debt Service Coverage Ratio
(DSCR) of 1.32x in Year 1 and an average DSCR of 1.55x over the
senior-debt tenor. The capital stack is shown below.

Figure 7.2

7.6 Revenue Build

Revenue in Year 1 is projected at ZAR 252 m, derived from 210 GWh of
generation at a starting blended PPA tariff of ZAR 1.20 / kWh. Tariff
escalates at 6.0% per annum, partially offset by 0.5% per annum module
degradation, producing a revenue compound annual growth rate of 5.4% per
annum over the first 20 years. After the contracted PPA expires (Year
21), revenue trajectory drops to a merchant equivalent at approximately
70-75% of the contracted tariff.

Revenue formula

Revenue (year n) = Generation (n) × Tariff (n) where Generation (n) =
210 × (1 − 0.005)^(n−1) GWh and Tariff (n) = 1.20 × (1 + 0.06)^(n−1)
ZAR/kWh through year 20.

7.7 Projected Income Statement (P&L)

The full 25-year P&L is summarised in the tables below, with all
values in nominal ZAR millions. Following project-finance convention,
depreciation is taken straight-line over the 20-year contracted PPA
tenor, and senior debt amortises on a sculpted (DSCR-target) profile
over 15 years.

7.7.1 P&L — Years 1 to 5

7.7.2 P&L — Years 6 to 10

7.7.3 P&L — Years 11 to 15

7.7.4 P&L — Years 16 to 20

7.7.5 P&L — Years 21 to 25 (post-PPA tail)

Years 21 to 25 reflect a return to merchant tariff equivalent at
approximately 75% of contracted tariff, no remaining depreciation, and
reduced operating margin as O&M cost continues to escalate.

Figure 7.3

7.8 Projected Cash Flow Statement

Cash flow from operations is structurally aligned with EBITDA
(revenue is contracted; O&M is the only material operating cash
outflow), modified for the tax burden and minor working-capital
movement. Cash flow from investing is dominated by the
construction-period capex outflow, with subsequent annual maintenance
capex equivalent to ZAR 8 m. Cash flow from financing reflects
senior-debt amortisation through Year 12 and equity distributions
thereafter.

7.8.1 Cash Flow — Years 0 to 5

7.8.2 Cash Flow — Year 5 Waterfall (illustrative)

Figure 7.4

7.8.3 Cash Flow Summary — Years 6 to 25

In years 6 through 12, debt service continues to absorb the majority
of operating cash flow, with sponsor equity distributions commencing
modestly. From Year 13 (post-debt repayment) cash distributions to
equity step up materially, supporting a strong back-end equity IRR.
Years 21-25 reflect post-PPA merchant tail.

7.9 Cumulative Cash Flow & Payback

Figure 7.5

7.10 Projected Balance Sheet

The projected balance sheet evolves around two principal dynamics:
depreciation of the project asset (straight-line over 20 years) and
amortisation of the senior debt facility (sculpted, full repayment by
end of Year 12). Equity grows steadily through retained earnings until
the start of distributions in Year 6.

7.10.1 Balance Sheet — Years 0 to 5

7.10.2 Balance Sheet — Years 10 / 15 / 20 / 25 (selected)

7.11 Key Bankability Metrics

7.12 Project & Equity IRR

7.13 Sensitivity Analysis

The project’s levered equity IRR has been stress-tested across the
seven principal financial-model variables. The chart below reports the
marginal change in IRR from a one-variable shock in each direction. The
model is most sensitive to PPA tariff and capex, both of which are
largely controllable through robust contracting and procurement.
Sensitivity to debt cost and ZAR / USD is moderate but addressable
through tenor extension and FX hedging.

Figure 7.6

7.14 Scenario Analysis

7.15 Returns Summary

Combining the bankability metrics, IRR profile and stress testing,
MEGAPOWER’s 100 MW project is structured at a base case that comfortably
clears the lender thresholds typically applied to South African REIPPPP
projects (DSCR ≥ 1.20x; LLCR ≥ 1.40x), while delivering an equity return
profile competitive with both global-utility-scale precedents and South
African infrastructure-equity benchmarks.

Confidential — this business plan is provided to prospective investors and lenders for evaluation purposes only and may not be reproduced or distributed without the written consent of MEGAPOWER Solar Power (Pty) Ltd.