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FINANCIAL MODELLING FOR UTILITY TARIFF SETTING

Financial Modelling for Utility Tariff Setting is offered by Managing Infrastructure Investment Reform and Regulation in Africa (MIRA), a leading centre of excellence at the UCT GSB. This specialised one-week course provides managers, senior professionals and advisors in utilities, regulatory authorities and government the skills needed to set tariffs in a regulated context.

 

Gain practical know-how

Professionals in the power sector need specialised skills. In particular, financial modelling for tariff setting is a core skillset that is lacking on the continent and in South Africa’s regulatory, municipal and utility space. This course teaches delegates the practical skills to build a financial model – including all constituent parts such as regulatory asset base, weighted average cost of capital, and energy and input costs – that can run sensitivity analyses and provide various tariff paths.

 

Key topics

  • Basic financial concepts and basic Excel financial formulas (optional)
  • Tariff objectives
  • Cash flow and accounting equivalence: Building a simple model from scratch
  • Valuation techniques
  • Capital costs: Asset base, capex, depreciations
  • Endogenous and exogenous capex
  • Costs of capital: WACC, costs of debt, costs of equity
  • Opex: efficiency levels, benchmarking, demand projections
  • Fixed and variable costs
  • Tariff level and tariff structure, efficiency and affordability

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Graduate School of Business  |  University of Cape Town

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