A premier real estate developer in Pakistan needed funding to begin construction, and had to show lenders it could repay. We built a detailed project finance model that set out the right financing structure and showed that debt could be serviced throughout the project.
- Location
- Pakistan
- Sector
- Real Estate
The Brief
The Client asked us to develop a project finance model to support its bid for construction-phase funding and demonstrate its repayment capacity.
The work included sensitivity analyses on debt levels, interest rates and covenant compliance to find the optimal financing structure, and a debt issuance schedule aligned with projected revenues and costs.
The Obstacle
Debt disbursement had to follow the construction plan, so we needed a cash flow strategy that met every operational and financial outflow across the project timeline without the project ever going cash negative.
Projecting debt service ratios over the life of the project meant balancing the need to service debt against the risk of breaching covenants.
Our Approach
We matched projected revenues and costs across the project timeline and scheduled debt issuance around them, so cash would always be available to meet construction and financing outflows.
We then tested the structure against changes in debt levels, interest rates and covenant thresholds to identify the financing mix that kept debt servicing on track.
What We Delivered
We supported the Client in structuring a project finance model that aligned construction cash flows with debt servicing requirements:
- Mapped project revenues and costs to maintain a positive cash position through the development period.
- Built debt servicing analysis covering repayment capacity, interest costs and covenant compliance.
- Tested key sensitivities across debt levels, interest rates and financing assumptions to assess project resilience.
Our Impact
The Client secured project financing and was able to commence construction.
With a clear financing structure and a model showing covenant compliance throughout, the developer could make its case to lenders with confidence.
