Financial Analysis Model of Potential Net Revenue from Leasing Fiber Cores

under the USAID Southeast Asia Enhancing Development and Growth through Energy (EDGE) Hub, developed a financial analysis model to evaluate the potential net revenue from leasing fiber cores in Timor-Leste. The model considers the operation to monetize Electricidade de Timor-Leste's (EDTL) fiber-optic cables asset, referred to as the Project, on a standalone basis and as a separate entity from EDTL. The financial analysis model is designed to provide a clear analysis of the Project's financial impact under various monetization strategies. The purpose of this report is two-fold: to serve as a user guide for the Model, providing instructions on how users can update the financial analysis model, read the key output metrics, change various assumptions, and select existing and/or add new scenarios; and to describe the key output of the current Base Case and four additional scenarios of the Model. The Base Case scenario assumes dark fiber sales only, while the four additional scenarios analyze the combination of dark and lit fiber sales, lit fiber sales only, target 15% IRR from 2 dark fiber (IRU) customers only, and target 15% IRR from 2 lit fiber (capacity lease) customers only. The scenarios are based on the current situation, desired scenario in the long-term, private sector practice, and private sector practice with dark fiber sales. The table below illustrates the key performance metrics for each scenario. The Base Case scenario has a project payback period of none, an undiscounted free cash flow of $(45,673), and a net present value of negative $1,000. The other scenarios have varying project payback periods, undiscounted free cash flows, and net present values. The financial analysis model relies mostly on proxy assumptions derived from general market research, industry knowledge, and expertise to build the Model and perform the analysis. However, much of the key information needed to perform this analysis was either unavailable or inaccessible, and it is highly likely that if actual data is used, the analysis and the financial analysis model output will change materially. The model considers the operation to monetize EDTL's fiber-optic cables asset, referred to as the Project, on a standalone basis and as a separate entity from EDTL. The Project provides for a clear analysis of the Project's financial impact under various monetization strategies. The financial analysis model is designed to provide a clear analysis of the Project's financial impact under various monetization strategies. The model output includes the key performance metrics for each scenario, such as project payback period, undiscounted free cash flow, and net present value. The model also provides a clear analysis of the Project's financial impact under various monetization strategies. The financial analysis model is designed to provide a clear analysis of the Project's financial impact under various monetization strategies.