Infrastructure Investment Financial Modeling

This project models a capital-intensive infrastructure investment funded entirely through equity (R50–60 million). It produces stable operating cash flows over 10 years and includes reinvestment (CapEx), capital repayment, and profit distributions to the investor through a waterfall structure. A terminal exit value is also modeled for valuation purposes.

Project IRR: 20.5%

Project NPV: R13.1 million

Project MOIC: 1.9×

Exit Value: R74.4 million (based on 5× Year 10 EBIT)

CapEx: R60 million total (R35m in Year 1, R25m in Year 2)

These metrics reflect economic performance of the asset, using Free Cash Flow to Firm (FCFF) as the basis — deducting CapEx, ignoring financing, and focused purely on the project’s ability to generate value over time.

Investor IRR: ~6–7% (depending on exit assumptions)

Gross MOIC: 2.63×

Capital MOIC: 1.00×

Profit MOIC: 1.63×

Capital Repaid: Fully repaid by Year 5

Distributions: Begin once capital is fully returned

Exit Proceeds: Distributed fully in Year 10

The waterfall is modeled using actual operating cash flow, not FCFF. It ensures that:

Capital is repaid first

Profit is only distributed after full capital recovery

Exit value is paid to equity in full

FCFF is used only for valuation, not for determining actual repayments

CapEx is treated strictly as reinvestment, not a repayment of equity

Year 1–2 show negative FCFF but still generate real cash used for equity payback

Modeling avoids the common mistake of confusing FCFF with available liquidity

This project demonstrates:

Strong operating efficiency (20.5% IRR at the project level)

Slower return to equity (due to front-loaded CapEx and no leverage)

Full capital recovery followed by meaningful distributions

Exit event significantly enhances total return (R74.4m distributed in Year 10)