New-Build Power Station Financial Modeling

Financial Model design for 1,400MW Coal Fired Power Plant in Malaysia


  • Malaysia’s power utility was planning a power plant in the northern Kedah state capable of producing 1,400 MW at a cost of 4bn ringgit ($1.1bn)
  • State-controlled Tenaga, projecting slower electricity demand growth, has cut capital expenditure 26 per cent to 5.7bn
  • In addition, the client has cut its forecast of electricity demand growth to five per cent from an earlier 9.4 per cent


  • Frequent unscheduled downtime of power plants had at all times affected the operating reserve
  • Although actual operating reserve figures were at times below target, the spinning reserves were allocated and maintained at 1,200MW level
  • Before the commissioning of the 1,000MW ultra-supercritical coal plant, Peninsular Malaysia’s total installed capacity for 2016 was 22,435MW
  • A total of more than 2,500MW of capacity was added into the system including short term extension of existing plants in order to replace the capacity retirements
  • In terms of planning, the reserve margin is deemed to increase from 28% in 2016 to 29% in 2017 (peak day of the year)
  • The system reliability criteria set at Loss of Load Expectation (LOLE) of not more than 1 day per year was observed to be met in 2016


  • Developed a financial model that supported evaluation of the ROI which also included EPC (Engineering, Procurement, and Construction) margin and equity return to assist the decision-making process
  • Developed EPC (Engineering, Procurement, and Construction), CapEx (Capital Expenditures) and funding schedule using timing flags
  • Built a flexible timing structure using timing flags
  • Revenue, operational and maintenance expenditures
  • Forecast cash flow available for debt servicing (CFADS)
  • Forecast debt repayment and interest schedule (For different types of debt structures)
  • Assessed interest during construction & controlling circular referencing
  • Evaluated repayment waterfall, reserve accounts, cash sweeps, etc.
  • Built project’s flexible debt repayment schedule for various sources of financing
  • Modeled key financial drivers used to evaluate a project finance transaction
  • Performed scenario and sensitivity analysis in the financial model


  • Prepared the financial model and summary results and recommendation that led to decision-making
  • Developed a feasibility study to identify key risks, establish quality control parameters and targets and schedule
  • Continued monitoring and researched the Malaysian power market (level of the Capex, fuel price, tariff and IRR) to assess the business opportunity over the time

Please let us know if you have a question, want to leave a comment, or would like further information about Agile Dynamics