Project Finance Training Course
Course Highlights and Agenda
This unique project finance training course has been designed for professionals needing a thorough grounding in limited-recourse financing applied to a range of capital-intensive industries, such as:
- Power generation
- Alternative energy
- Upstream, midstream and downstream oil and gas and petrochemicals
- Mining
- Infrastructure
- PPP/PFI projects
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Agenda
What is Project Finance?
- Definition – “Project Finance” as opposed to financing of a project
- Limited-recourse and non-recourse finance
- Origins of project finance
- Who uses project finance and why?
- What is the downside?
Sponsors and Lenders/ The Lender’s Risk Analysis
- Different risk/reward objectives of sponsors and lenders
- Balancing equity and debt
- Different types of debt – senior/ subordinated/mezzanine
- Structural & pricing drivers
– Country/political risk
– Sponsors
– Supply/resources
– Technology and construction/completion
– Sales/offtake
– Operation & maintenance
– Abandonment/decommissioning
– Environmental/regulatory
– Quantitative risk analysis - project modelling - Key ratios – annual debt service, loan life and project life covers
- Balancing equity and debt
– Design of project models
– Modelling best practice
– Developing an appropriate base case – setting economic and technical parameters
– Sensitivity analysis
– Choosing/calibrating sensitivities
– Getting to loan value
The Project Finance Process
- The Players and their interests
- Ownership structures
- Key project contracts
- Role of advisers:
– Financial advisers
– Technical advisers/consultants
– Legal counsel - The financial feasibility study/debt structuring
- The information memorandum
- Debt underwriting/syndication
- Financial close
- Post-close monitoring
Other Sources of Debt Finance / Risk Mitigation
- The bond markets
- Credit enhancement through guarantees
- Islamic finance
- Private political risk insurance market
- Export credit agencies
- Multilateral agencies/development banks
- Sponsor co-financing
Project Financing Documentation
- The term-sheet – purpose, legal status, binding/non-binding aspects
- Term-sheet/documentation provisions:
– Purpose clause
– Interest/fees
– Repayment/prepayment
– Representations & warranties
– Covenants/undertakings
– Conditions precedent
– Security
– Control accounts/waterfalls
– Events of default - Term-sheet interactive exercise
- Legal opinions
- LMA standard terms
Sustainable Lending – the Equator Principles
- Origins & purpose of the equator principles
- Development and current adherents
- Purpose & scope
– Best practice in sustainable lending
– Bank obligations
– Project classification under the equator principles - Practical application using examples
Energy Project Finance
- Oil & gas financing
– Overview of the oil & gas chain – upstream to downstream
– Upstream finance – single-field finance and “Borrowing Bases”
– Midstream finance – refineries and pipelines
– Downstream finance – liquefied natural gas (LNG) and petrochemicals - Power project finance
– Financing new-build power projects
– Merchant vs. contracted plants
– Alternative energy projects
* Wind power – onshore and offshore
* Waste-to-energy
* Hydro/wave power
Infrastructure Project Finance
- Toll-road and bridge financing
- Rail/light rail systems
- Water/desalination projects
PFI/PPP Projects
- Rationale for public to private projects
- The PFI/PPP process
- Regulatory/public sector oversight
- Project types
– Hospitals
– Schools
– Housing
– Prisons
What You Will Learn
The project pinancing process is examined in detail, focusing on financing term sheets and documentation. Delegates then progress to a study of the project financing challenges of today, using case studies and group discussions to apply the skills they have acquired. Particular emphasis is given to:
- Understanding the challenges of each industry branch
- Using the qualitative risk 'template' and econominc modelling to address those challenges
- Developing a feel for what is and is not achievable from a financing perspective - and why
- Recognising how structures have changed over time
Reviews
"This is my first course and that was great! It puts a lot of pressure on my future instructors!"
"Aside from the appropriate course content, I felt that the mix of people allowed for various perspectives to be discussed. It gave us the change to meet people from other organisations and build a network"
"Best course I have attended. Relevant to the point, structural and very interesting. Material very well presented"
"Excellent practical sessions. It's been very helpful to gain knowledge of a banker's view… already one of the best courses I've attended"
"The trainer was very engaging, helping to maintain concentration and interest on the topic."
"Course leader - stunning!"
