Reserve accounts
Debt service reserve and maintenance reserve.
By Surojit Chakraverti, founder of L3VLUP and an investor running a long-short healthcare and technology equities strategy.
On this subject: reserve accounts.Updated 30 September 2026
Part of project finance and infrastructure models, with the models, labs and guides around it.
What it does
Two cash trays that fill before equity sees anything. The debt service reserve holds a set number of periods of forward debt service, funded at commercial operation and adjusted each period as service changes, and is released as the loan runs off. The maintenance reserve is funded steadily against a calendar of major-maintenance events and drawn when they fall, so a lumpy cost does not breach coverage in the period it lands. A PPP does the same for lifecycle replacement: the lifecycle reserve is funded at the lowest level indexed charge that never lets it run dry, and its balance is released at the end of the concession.
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.
- Assumptions, row 36: Major maintenance calendar
- Waterfall, rows 11–14: DSRA target balance, Opening balance, Funding / (release), Closing balance
- Waterfall, rows 17–23: Operating period flag, Opening balance, Funding, Major maintenance paid from MRA…
- Operations, rows 13–20: Cumulative inflation index, Cumulative lifecycle spending, Level funding needed to date, close prices, Lifecycle reserve funding, close prices…
What a reviewer looks for
- Reserves omitted, overstating early distributions.
- The DSRA sized on backward rather than forward service.
- Maintenance paid from CFADS and also from the reserve.
Learn it, then build it
Vocabulary: Debt Service Reserve Account (DSRA), Lifecycle Costs.