Hi Naaman,
the raionale is as follows:
(Capex + A)*(1 + B)^(C) = Enterprise Value
where:
A is the value of all shares (This is what we are calculating)
B is the interest rate = 12.5/100
C is the number of years that I assume the capital is locked away while the project is developed and not able to make a return on investment. this is essentially discounting the value of the project. I used 2 years.
So, the (1+B)^C became (1.125)^2
Hope that helps...