# Multi-Phase Project Cash Flows

This use case explains how to model multi phase project cashflows for capital projects and infrastructure in Model Reef.

You will:

* Represent project phases such as development, construction and operations.
* Build cashflow drivers for each phase, including capex, opex and revenue.
* Use timing, delays and schedules to model milestone and progress payments.
* Connect project cashflows to group statements and valuation.

Model Reef is not a full project controls or scheduling tool. It captures financial consequences of project phasing using structured assumptions and time series.

## When to use this pattern

Use this pattern when:

* Projects span multiple years with distinct phases.
* Cashflows differ significantly between development, construction and operation.
* You need to understand funding requirements and payback profiles.
* You want to align project level cashflows with group cash and valuation models.

It builds on:

* Capex Program Modelling
* Funding and Drawdown Structures
* Long Horizon Scenario Planning
* Build a Cash Waterfall Model

## Architecture overview

Multi phase project cashflow modelling uses:

* Project phase structure
  * Drivers and variables grouped by phase.
  * Timelines that span pre construction to operations.
* Cashflow components
  * Development and pre construction cost.
  * Construction and commissioning capex.
  * Operating revenue and costs after commissioning.
  * Residual or decommissioning items where relevant.
* Timing and payment behaviour
  * Milestone and progress payment schedules.
  * Retentions, claims and variations where approximated.
  * Payment delays and funding draw behaviour.
* Integration
  * Roll up to group reports.
  * Inputs to valuation and funding models.

{% stepper %}
{% step %}

### Define project phases and timelines

For each project branch, decide the phases you want to model, for example:

* Phase 1: Development and design.
* Phase 2: Construction.
* Phase 3: Commissioning.
* Phase 4: Operations.

Create Data Library drivers for:

* Phase start and end dates.
* Flags or multipliers that indicate which phase is active in each period.
* Any overlaps between phases where development and construction run in parallel.

Use these drivers to control when phase specific variables are active.
{% endstep %}

{% step %}

### Model development and pre construction cashflows

Create Opex and Asset variables for:

* Feasibility studies and design.
* Approvals, permits and professional fees.
* Land acquisition if applicable.
* Early enabling works.

Assign timing such that:

* Development costs occur in the correct pre construction periods.
* Land and long lived items are treated as Assets where appropriate.
* Non recoverable development costs are treated as Opex.

These flows will appear in early periods of the Cashflow Statement and Cash Waterfall.
{% endstep %}

{% step %}

### Model construction, commissioning and capex payments

Using Capex Program Modelling as a base, define:

* Capex by asset type and construction phase.
* Milestone or percentage of completion based payment profiles.
* Retention amounts withheld until completion where you want to approximate this behaviour.

You can express construction cashflows as:

* Periodic progress payments based on planned cash schedules, or
* Scheduled milestone payments using timing rules and manual series.

Set payment delays and schedules to approximate contractual terms such as:

* Payment 30 or 60 days after claim.
* Retentions paid on practical completion and final completion.

This will create detailed construction phase cashflows and asset additions.
{% endstep %}

{% step %}

### Model operational revenue, cost and sustaining capex

Once commissioning is complete, use normal operating modelling patterns to represent:

* Project revenues, for example tolls, tariffs, availability payments or output based payments.
* Operating costs including staff, maintenance, utilities and services.
* Sustaining capex and major periodic maintenance.

Tie the start of operational variables to commissioning timing so that:

* P\&L and cashflows for operations begin when the asset is available.
* Links to wider group revenue and cost models are aligned with project start.

You can use utilisation and capacity drivers to vary operational flows across time.
{% endstep %}

{% step %}

### Integrate project cashflows with funding and group models

Combine project cashflows with Funding and Drawdown Structures by:

* Aligning drawdown timing to development and construction cash needs.
* Representing construction facilities, term debt and equity injections at project or group level.
* Capturing interest during construction and capitalised interest where relevant.

At group level, project cashflows and funding movements will feed into:

* Group Cashflow Statement and Cash Waterfall.
* Balance Sheet assets and liabilities.
* Valuation models based on FCFF and FCFE.

This gives you a coherent view from project to portfolio.
{% endstep %}

{% step %}

### Use scenarios for timing, cost and revenue risk

Clone the project model into scenario models to test:

* Delays in approvals, construction or commissioning.
* Cost overruns in development and construction phases.
* Different ramp up curves for operations.
* Variations in tariffs, tolls or utilisation.
* Changes in funding structure or cost of capital.

In each scenario, adjust:

* Phase start and end dates.
* Development and construction cost drivers.
* Revenue and operating cost profiles.
* Funding model drivers and discount rates.

Compare scenarios using:

* Project level net cashflows and payback profiles.
* Group level funding and covenant impacts.
* Valuation metrics such as NPV and IRR.
  {% endstep %}
  {% endstepper %}

{% hint style="info" %}
Check your work

* Phase timelines match project schedules at high level.
* Development, construction and operational flows are clearly separated.
* Cash timing and payment delays reflect typical contract conditions.
* Scenario results are interpretable for project, finance and investment stakeholders.
  {% endhint %}

## Troubleshooting

<details>

<summary>Cashflows appear in the wrong phase</summary>

Check phase flags and timing drivers to ensure variables are active only in intended periods.

</details>

<details>

<summary>Difficult to reconcile project totals to budgets</summary>

Validate that all development and construction cost items are included and that any contingency or escalation is accounted for separately.

</details>

<details>

<summary>Models become too complex for smaller projects</summary>

Use a simplified two phase structure, such as build and operate, and treat detailed timing inside each phase as aggregated series rather than fine grained schedules.

</details>

## Related guides

* [Build a Cash Waterfall Model](/how-tos/core-modelling/build-a-cash-waterfall-model.md)
* [Build a Multi Division Model](/how-tos/core-modelling/build-a-multi-division-model.md)
* [PDF Import Overview](/help/importing-and-data-inputs/pdf-import-overview.md)
* [Formula Output Preview](/syntax/formula-syntax/formula-output-preview.md)


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