I want to begin my story by recounting my first day as a consultant at the African Development Bank. At the time, my supervisor was Andrey Kelvchuk. He invited me to a crucial board meeting for a project. As I entered the grand room, I beheld the President of the African Development Bank at that time, Mr.Donald Kaberuka, seated at the head of a long table, surrounded by brilliant minds engrossed in discussions about the future of a project.

The experience at that board meeting was a turning point. It completely transformed my perspective and motivation. Returning to my desk afterward, I looked at my spreadsheet with fresh eyes. My understanding of the project had fundamentally shifted. This transformation altered my viewpoint on project appraisal and elevated my ambitions.

Soon after, I was assigned to a project. Within a week, I was preparing for a mission to visit the site of a hydro project. This hands-on experience is another pivotal moment in my journey.

Upon arriving at the project site, I was met with nothing more than an expanse of land. You may wonder why a financial modeler’s presence would be valuable on-site. However, I was privileged to engage with government officials, local communities, and other lenders and sponsors during the visit. Together, we donned boots and explored the project site. They pointed out the exact location of the dam and the communities that the construction would impact. I also had the opportunity to meet the local workforce who would be employed on the project.

This immersive experience gave me a deeper understanding of the project and its stakeholders. It allowed me to see the project in a new light, transforming the spreadsheet and financial model into dynamic tools that reflected the real-world complexities of the endeavor.

I came to appreciate the significance of constructing a dam in a remote and challenging project site. I understood the operator’s commitment to maintaining the plant through an O&M contract and the importance of having contingency plans to mitigate risks. Furthermore, my interactions with lenders and sponsors gave me insights into their perspectives and evaluation processes.

This profound experience broadened my perspective on the entire project. The financial model was no longer a lifeless framework but a dynamic entity in 3D.

This is why I advocate for financial modelers to immerse themselves in every facet of a project. Remember, the financial model encapsulates all aspects of the project, from technical and financial to tax and legal considerations. To breathe a third dimension into your financial model, it’s imperative to have a financial modeler and advisors deeply engaged in the project, and well-acquainted with all stakeholders involved.

So, if you are a financial modeler, don’t confine yourself to the role of a mere spreadsheet engineer. If you are in the position of hiring a financial modeler, ensure their active involvement in every aspect of the project. This way, you’ll possess a financial model that is flexible, appropriate, structured, and transparent.—a FAST model.

What are your thoughts on this? What has been your experience working on projects? Is it worth investing in such expertise and allocating resources to ensure advisors comprehensively understand the project? Share your thoughts in the comments below.