Course description
Advanced Project Finance
This ten-day Project Finance Academy is designed to help bankers, private investors, project developers, equipment suppliers, official creditors, and other project participants acquire the skills they need to evaluate project financing transactions in a wide variety of industrial sectors. Relying heavily upon examples from around the world characteristic of the energy, transportation, social services, water, sanitation, telecommunications, oil, gas and mining, attendees will be brought up to date on the latest techniques and innovative approaches to structuring and funding projects.
Upcoming start dates
Suitability - Who should attend?
Who Should Attend?
The courses will be of value to professionals in the following areas:
- Bankers/Investment Bankers
- Financial Advisors
- Sponsors/Project Joint Ventures
- Project Developers
- Government Agencies
- Public Sector Managers
- Export Credit Agencies
- Multilateral Agencies
- Accountants and Taxation Advisers
- Financial Analysts
- Share Market Analysts and Brokers
- M&A and Buyout Specialists
- Privatization Executives
- Company Treasurers and Directors
- Credit Committee Staff
- Rating Agencies
- Project Managers and Engineers
- Project Consultants
- Investment/Portfolio Managers
- Insurance Advisers and Brokers
Training Course Content
Day 1 Themes: Structuring Projects and Creating a Security Package; Oil and Gas Projects
- Project Finance Overview
- Current Challenges /Approaches
- Who are the Players? Identifying and Allocating Risks
- What Can Go Wrong?
- Examples from Natural Resources and the Energy Sector
- Financing Infrastructure
Various Projects and Approaches to Risk Identification Across Sectors
- Risks in Development,
- Construction, and Operating Risks
- Feedstock and Supply
- Market Risks
- Environmental Risks
- Financial Risks
- Political and Regulatory Risks
Sources of Finance: Financing Checklist
- Domestic and Foreign Banks
- Bond Markets
- Development Banks, ECAs, and Other Official Creditors
- Leasing
- Islamic Finance
- Sources of Equity
Cashflow Forecasting
- Financial Modeling and Cash Flow Analysis
- View of Lenders: DSCR and PV Coverage
- Equity Considerations: IRR and NPV
- Approaches to Evaluating the Cost of Capital
- Project Returns vs. Equity Returns
- Forecasting Techniques and Limitations
- Probabilistic vs. Non-Probabilistic Model-Building
Case Study: Working with Cash Flow Modeling Software to Finance a Fertilizer Plant
Participants break into small groups to prepare a case study that analyzes a fertilizer project. A computer simulation will be used to model cashflows. Groups will present their solutions.
End of Day 1
Day 2 Themes: Sources of Finance and Credit Enhancement; Power Projects
Legal Issues and Documentation
- Legal Environment and Regulatory Conditions
- Commercial Points and Legal Points in Various Project Structures:
- Key Contractual Agreements and Structuring Considerations
- Developing a Term Sheet
- Limiting Recourse
- Tax Gross Up Issues
- Market Disruption Provisions
- Reps and Warranties
- Conditions Precedent
- Covenants Including MAC Clauses
- Hedging Requirements
Sources of Finance
- Banks and the Current Club Loan Market
- Syndicated Loan Financing
- What Security do Banks Want?
- Market Flex Clauses
- Development Bank "A" and "B" Loans and Other Funding Sources
- Inter-creditor Issues
Credit Enhancement Alternatives
- Guarantees and Insurance vs. Funding
- Buyer and Supplier Credits
- Bank Incentives Inherent in ECA Programs
- Costs and Availability
- Securitization of ECA Guarantees
- Choosing a Special Purpose Vehicle
Liberalizing Power Markets
- Market Forces and Effect on Electrical Supply
- Fragmentation of Electricity Generation
- Generating, Transmission, Distribution
- Merchant Power Plants (MPPs)
- Rating Agencies' Analytical Model
End of Day 2
Day 3 Themes: More Financing Sources and Structuring Considerations; Renewable Power Project Transactions
Renewable Energy Project Financing
- Growth of the Market: Sectors, Drivers of Growth
- Energy Usage and Investment Globally
- Global Incentive Programs
- Renewable Energy Sources
- Comparative Levelized Cost of Energy (LCOE)
Case Study: Financing a Solar Farm
Risk allocation among various project participants to finance and construct a 550MW solar facility. Testing the project's cash flows under varying scenarios. What are acceptable DSCR levels? What returns does equity look for?
Capital Markets Applications
- Private Placements and Eurobond Issuance for Projects
- Comparing Bond Issuance to Bank Loans
- Nature of Investors, Timing and Flexibility
- Project Size and Relative Cost
- Security Requirements
- Negative Arbitrage Issues
- The Due Diligence Process / Road Shows
- Rating Agency Considerations
Islamic Finance and Leasing
- Definitions, Principles, and Authoritative Sources
- Structures: Murabaha, IstisnaandIjara
- Examples of Petrochemical and Other Transactions
- Leasing Applications in Projects
- Evaluating Cost
End of Day 3
Day 4 Themes: Credit Enhancement with Development Banks and Other Official Creditors; Transportation Projects; Risk Management and Derivatives
What is Public Private Partnership (PPP)?
- Public Private Partnerships (PPP) Principles
- Roles for the Public and Private Sector
- Different Structures and Degrees of Private Participation
- Contract Services: Operations and Maintenance, Management
- Leasing, Lease Develop Operate (LDO), Lease Purchase, Sale Leaseback
- Design Build: DB, DBM, DBO, DBFO
- BOT, BOO Concessions
- Transport Projects and Social Infrastructure
Development Banks and Agencies
- World Bank Group
- Regional Multilateral Development Banks (Asian Infrastructure Investment
- Bank, Asia Development Bank, Africa Development Bank, EBRD, EIB,
- Inter-American Development Bank, Islamic Development Bank,
- Others)
- Bilateral Agencies (FMO, DEG, OPIC, Proparco, etc.)
Transportation Projects and Other Infrastructure
- Long-term Concessions
- Roads, Railroads, Airports, Ports and Other
- Constructing a Specialized Risk Matrix
Case Study: Airport Finance; Negotiating a Term Sheet.
Participants will break into groups to work on this project structure. Discussion will focus on project risks, their allocation through contracts, the mix of financing, cash flow projections, as well as rating agency considerations in evaluating the proposed financing structure.
Self-test and Wrap-up
End of Day 4 and Module 1
Course delivery details
Program Structure
The program is divided into two modules that may be attended in full or booked separately:
Module 1 Conducted from days 1 to 4 comprises the program’s core. In a rapid-paced discussion of key aspects of project structures, at its conclusion participants will be able to break the analysis into its component parts. They will have gained techniques for assembling market information, making qualitative judgments, developing key agreements, and conducting thorough quantitative financial analysis of projects.
This portion of the program also identifies the many sources of finance and risk support available for projects. From bank markets, and bond issuance, to leasing and other foreign and local currency funding alternatives, highlighting their differences, requirements, and investor concerns.
The module pays careful attention to the many techniques for enhancing the terms of funding provided by official players like Export Credit Agencies, Development Banks and Private Risk Insurers.
Module 2 Builds on the foundation established in the first portion of the program. A day-long session gives participants a hands-on opportunity to build a cash flow model using Excel-based software. At the conclusion of the segment, participants will have a pro forma project model suitable for examining debt capacity and project return on investment.
Hybrid Sessions Timing and Case Reading
The program may be attended in person, or online. Each day will commence at 10:00 am and conclude officially at 6 pm GMT (Greenwich Mean Time).
The course is heavily reliant upon cases and examples to reinforce understanding and ensure the application of concepts. Case Studies, to be discussed in class are sent as pre-reading. Overnight reading and casework are expected every evening.
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Expenses
Course fee: £4495+VAT
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