Development of prospective financial models for four water, sanitation and electricity utilities - Morocco
Context
The project is part of the French Development Agency’s (AFD) appraisal of loans to four autonomous water, sanitation, and electricity utilities in Morocco to support their investment projects.
AFD would like to have access to prospective financial models based on the planning elements of the utilities in order to carry out simulations to assess the counterparty risk and approve the financial feasibility of the projects.
Objective
The objective of the mission is to produce four financial models that will provide visibility to the AFD on the financial prospects of the various public utilities and their potential financing and/or subsidy needs, and to facilitate the financial management of their activities.
Our contribution
For each model, our team has conducted the following activities :
- Collection of historical data and investment plans
- Definition of hypotheses and drivers under different scenarios
- Establishment of projections to 2035
- Calculation of the main ratios of profitability, repayment capacity, and liquidity, according to different scenarios
- Definition of additional financing needs and their optimal distribution between debt and subsidy in view of the investment plan and regulatory constraints
- Training of the utilities’ teams in the use and updating of the models
In close concertation with the concerned public utilities and the AFD, we brought our modelling expertise to propose financial models that meet the needs of both parties (steering and decision support vs. assessing financial strength for financing).
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