Desalination Plant Financial Model
20-Year Financial Model for a Desalination Plant
This very extensive 20 Year Desalination Plant Model involves detailed revenue projections, cost structures, capital expenditures, and financing needs. This model provides a thorough understanding of the financial viability, profitability, and cash flow position of the plant. Including: 20x Income Statements, Cash Flow Statements, Balance Sheets, CAPEX sheets, OPEX Sheets, Statement Summary Sheets, and Revenue Forecasting Charts with the specified revenue streams, BEA charts, sales summary charts, employee salary tabs and expenses sheets. Over 120 spreadsheets of financial data to monitor.
Revenue Streams (Editable)
A. Industrial Water Sales Revenue
Sold in bulk (e.g., per cubic meter or long-term contracts).
Revenue Calculation:
Contracted Volume (m³/year) × Price per m³
Key Assumptions:
Annual price escalation (e.g., 3%).
Take-or-pay contracts to ensure minimum revenue.
B. Residential Water Sales Revenue
Tiered pricing based on consumption levels.
Revenue Calculation:
Number of Households × Avg. Consumption (m³/month) × Price per m³ × 12
Key Assumptions:
Population growth affects demand.
Possible government-regulated pricing.
C. Brine Sales Revenue
High-salinity byproduct sold to salt/mineral companies.
Revenue Calculation:
Volume of Brine (m³/year) × Price per m³
Key Assumptions:
If not sold, disposal costs may apply.
D. Chemical Sales Revenue
Extracted chemicals (e.g., magnesium, chlorine).
Revenue Calculation:
Volume of Chemicals (tons/year) × Market Price per ton
E. Byproduct Sales Revenue
Minerals, waste heat, or other reusable materials.
Revenue Calculation:
Quantity Sold × Unit Price
Income Statement (Profit & Loss)
Revenue
Sum of all revenue streams (Industrial, Residential, Brine, Chemicals, Byproducts).
Cost of Goods Sold (COGS)
Variable Costs:
Energy (40-60% of COGS).
Chemicals, labor, maintenance.
Gross Profit
Revenue – COGS
Operating Expenses (OPEX)
Fixed Costs:
Salaries, administration, permits, insurance.
EBITDA (Earnings Before Interest, Taxes, Depreciation & Amortization)
Gross Profit – OPEX
Depreciation & Amortization
Straight-line over asset life (e.g., 20 years for plant infrastructure).
EBIT (Earnings Before Interest & Taxes)
EBITDA – Depreciation & Amortization
Interest Expense
Cost of debt financing.
Taxes
EBIT × Corporate Tax Rate
Net Income (Profit After Tax)
EBIT – Interest – Taxes
Desalinaton Plant Cash Flow Statement
Operating Cash Flow
Net Income + Depreciation ± Changes in Working Capital
Accounts receivable, inventory, payables.
Investing Cash Flow
Capital Expenditures (Capex)
Plant construction, equipment, technology upgrades.
Financing Cash Flow
Debt Issuance/Repayment + Equity Financing
Net Cash Flow
Operating + Investing + Financing Cash Flow
Closing Cash Balance
Opening Cash + Net Cash Flow
Desalination Plant Balance Sheet
Assets
Current Assets
Cash & cash equivalents.
Accounts receivable (unpaid water bills).
Inventory (chemicals, spare parts).
Non-Current Assets
Property, Plant & Equipment (PP&E).
Accumulated Depreciation.
Liabilities
Current Liabilities
Accounts payable (suppliers, contractors).
Short-term debt.
Long-Term Liabilities
Bank loans, bonds (10-20 years).
Equity
Shareholder equity (initial investment + retained earnings).
Key Financial Metrics for a Desalination Plant
Revenue Metrics
Monthly Recurring Revenue (MRR): Predictable income from ongoing services like Residential and Industrial Water Sales.
Annual Recurring Revenue (ARR): Yearly equivalent of MRR, providing a long-term revenue outlook.
Revenue per Litre of Chemical Sales: Income generated per litre, reflecting refinery efficiency.
Cost Metrics
Capital Expenditure (CapEx): Initial investment in infrastructure, industrial construction.
Operational Expenditure (OpEx): Ongoing costs for maintenance, utilities, staffing, supplies and materials.
Waste Water Treatment: Total cost of operating and engineering costs, including power and maintenance.
Power Generation Capacity Expansion: Ratio of Generator Cost to energy delivered to achieve greater efficiency.
Sensitivity & Scenario Analysis for the Desalination Plant
Base Case: Expected demand and costs.
Optimistic Case: Higher demand, lower energy costs.
Pessimistic Case: Lower sales, regulatory constraints on brine disposal.
This model provides a complete financial framework for evaluating a desalination plant’s profitability, cash flow sustainability, and balance sheet health.
Discounted Cash Flow (DCF) Valuation for a Desalination Plant
1. Overview of DCF Valuation
The DCF valuation estimates the present value of the desalination plant by forecasting its future cash flows and discounting them back to today’s value. This approach helps determine whether the project is financially viable.
Key Steps:
Project Free Cash Flows (FCF)
Calculate Terminal Value (TV)
Discount Cash Flows to Present Value (PV)
Determine Enterprise Value (EV) and Equity Value
Projecting Free Cash Flows (FCF)
Free Cash Flow = EBIT × (1 – Tax Rate) + Depreciation & Amortization – CapEx – Change in Working Capital
Assumptions:
Forecast Period: 10-20 years (typical for infrastructure).
Revenue Growth: 2-5% annually (based on water demand).
EBIT Margin: 20-40% (depends on efficiency).
Tax Rate: 20-30% (jurisdiction-dependent).
CapEx: High in early years, then maintenance (~5% of initial Capex).
Final Notes on the Financial Model
This 20-Year Desalination Plant Financial Model must focus on balancing capital expenditures with steady revenue growth from diversified services. By optimizing operational costs, and power efficiency, and maximizing high-margin services like industrial water and chemical sales, the model ensures sustainable profitability and cash flow stability.
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