Walkthrough of Cash Flow projections for an infrastructure project.

Akhil D -

Hey everyone! Today, I want to show you a walk-through of a cash flow projection model I did for the Maputo Port Expansion Project. The purpose is to see how much investment from the World Bank will affect the Maputo Port Expansion’s cash flows. Supported by the African Development Bank and other MDBs, this project involved the expansion and modernization of the Port of Maputo in Mozambique, enhancing its capacity and efficiency as a key gateway for trade in Southern Africa.

The following is a more detailed explanation of the project.

I decided to do a financial and economic model to get a more complete picture of the project’s implications. To start off I did a financial analysis with some critical data points and assumptions.
Now, it’s time to do the projections. Most of my projections were based on the above data along with other market metrics and multiples.

 

 

I also assumed that many cash flow metrics in the “Without Project” category would eventually reach “With Project” numbers with a 5-year delay.

Now it’s time to do the economic analysis.
For this analysis, I primarily focused on the wages of Port of Maputo Expansion Project employees. I started with the following
assumptions.
Afterward, I conducted similar projections with similar market metrics/multiples and year delays to the financial analysis.
After the analysis, I compiled the data to calculate the project’s Net Present Value (NPV), or the intrinsic value. As you can see, World Bank investment has definitely increased the project’s intrinsic value.
Thank you for reading! Until next time!

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Comments:

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    camillebennett
    Very cool Akhil! How might a projection like this be used beyond research?
    Akhil Durvasula
    Thank you for your comment Ms. Bennett! Projections like these are really important for financial services firms. For example, if a Private Equity firm were to invest in the Port of Maputo, potentially by acquiring the company running the Port of Maputo, these cash flow projections would be instrumental in deciding how much money they invest through pure cash (also called Investor Equity) or Debt (also called Leverage). The more cash they use, the more the Private Equity firm would believe the project will have sustainable, long-term growth.
    Alana Rothschild
    Wow! This is such cool info. The amount of detail and work that went into these statements is amazing. I bet most teenagers are not even familiar with the World Bank so it is awesome that you are getting this kind of exposure. Keep up the great work!
    Arina Filatova
    This is really impressive, Akhil! Love it!

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