Project and equity returns
Gearing, project IRR, equity IRR and multiple.
By Surojit Chakraverti, founder of L3VLUP and an investor running a long-short healthcare and technology equities strategy.
On this subject: project and equity returns.Updated 30 September 2026
Part of project finance and infrastructure models, with the models, labs and guides around it.
What it does
The two returns that matter and the funding that separates them. The project IRR is earned by the asset before financing; the equity IRR is what the sponsor actually receives after debt service, the reserves and the lock-up have taken their turn. Gearing is the bridge between them. Where the debt is sculpted to coverage, gearing is an output of the sculpt; where it is set as a share of cost and repaid as an annuity, as in an availability PPP, coverage is the output and the lenders test it.
Where it lives
The same schedule in each model that carries it, with the rows to open. Open a model in the browser, go to the sheet, and click the lines.
- Returns, rows 6–7: Project cash flow, Equity cash flow
- Returns, rows 10–13: Total project cost, Senior debt, Sponsor equity, Gearing
- Returns, rows 16–20: Project IRR, per half-year, Project IRR, annual, Equity IRR, per half-year, Equity IRR, annual…
- Returns, rows 6–9: Equity cash flow, Calculated equity IRR, Equity invested, Gearing
- Returns, rows 12–13: Project cash flow, Project IRR
What a reviewer looks for
- An IRR on semi-annual flows quoted as if it were annual.
- Equity cash flows that count trapped cash.
- Gearing set as an input and the debt forced to fit it.