www.browneandmohan.com/file5.pdf
From project finance perspective, following ratios are useful to evaluate the viability of the solar power projects.
Average Debt service coverage ratio (ADSCR): is a good measure to estimate the available cash flows during a particular
period to services the debt obligation during the given period. An ideal ADSCR is 2x the cash flows.
Loan life coverage ratio (LLCR): measures the cash flows available during the loan period that can service the outstanding
debt obligations. Higher the ratio is better.
Project life coverage ratio (PLCR): measures the cash flows available during the life of the project that can service the
outstanding debt obligations. For lenders this is a useful measure, higher the ratio better it is.
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