Advanced Project Finance Workshop

3 days 3-5 Jul 2017, London UK £3,645.00 + VAT* Download brochure Add to basket
4 days 18-21 Sep 2017, Johannesburg South Africa £3,345.00 Download brochure Add to basket
4 days 25-28 Sep 2017, Singapore Singapore $5,790.00 Download brochure Add to basket

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Overview

Drawing heavily upon examples of oil and gas, power and transport infrastructure transactions, from the Asia region and elsewhere, during this rapid paced four-day session participants will be updated on the latest techniques and innovations in funding projects. They will learn to structure project transactions to minimize risks and improve prospects for future strong performance both in existing portfolios and new transactions.

The course helps participants understand the many sources of finance and risk support available to projects in Asia and globally. From banks, to bond issuance, leasing and other foreign and local currency funding, it highlights differences among markets, disclosure requirements, distribution, investor considerations, etc. Effective project risk management using interest rate, currency and commodity derivatives is described.

Attend the training week programme and save over 12.5% on the combined price of:

Take advantage of the special price of US$8,700 if you attend the full Project Finance Training week and Conventional & Renewable Independent Power Projects & Cashflow Modelling.

Who should attend

The courses will be of value to professionals in the following areas:

  • Bankers/Investment Bankers
  • Project Finance Modelers
  • Financial Advisors
  • Sponsors/Project Joint Ventures
  • Project Developers
  • Government/PPP Agencies
  • Public Sector Managers
  • Export Credit Agencies
  • Multilateral Agencies
  • Accountants/Taxation Advisers
  • Financial Analysts
  • Share market Analysts/Brokers
  • M&A/Buyout Specialists
  • Privatization Executives
  • Company Treasurers/Directors
  • Credit Committee Staff
  • Rating Agencies
  • Project Managers/Engineers
  • Project Consultants
  • Investment/Portfolio Managers
  • Insurance Advisers/Brokers

Instructors

We work with a series of expert instructors, please select the course location of interest to review the credentials of who will be delivering the programme.

London
Richard Tinsley

The course director is the president of a global network of investment bankers, project advisors and industry specialists.

He has over 25 years of hands-on project finance experience, in both debt and equity. He has been the lead banker and chief advisor for some US$28.3 billion of project financing world-wide (in over 37 countries). He now specialises in the integration of political risk structures into BOO/ BOOT and independent power project financing.

He has pioneered a number of applications by cross-fertilising practices from one region or industry sector to another. He is a widely recognised author and expert on risk mitigation techniques in project finance structuring.

Now based in Sydney, Australia, he has worked at every level of international project financing, for institutions such as Continental Bank, a commercial bank in Chicago; European Banking Company, a consortium merchant bank in London; Prudential–Bache Capital Funding, a Wall Street investment bank in Australia and as the Project Finance Director of Indosuez Australia, now Credit Agricole.

Singapore
Meg Osius (new)
The Course Director specializes in capital markets, risk management, and international project finance. She works with corporations, financial institutions, public agencies, law firms, and private equity investors. She has had extensive transactional experience in the oil, gas, power, transport, and telecom sectors.

She began her career at JP Morgan Chase Manhattan Bank, where she structured highly leveraged deals and project financings also advising clients on foreign exchange and other price risk management strategies. Before that she was responsible for evaluating the quality of the bank’s global loan portfolio as well as that of its newly acquired affiliates. In that role she had extensive experience with workout and distressed debt.

She has published articles in the business press and co-authored several self-study guides covering international project finance, trade and export finance, foreign exchange, and financial futures. The World Bank has published her articles on approaches to financial analysis in emerging markets.

Previously she was Chairperson of the Technical Advisory Panel (TAP) of the Public Private Infrastructure Advancement Fund (PPIAF) managed by the World Bank. The fund provides technical assistance to emerging market governments in order to encourage private involvement in infrastructure development. She is currently a Director of British Caribbean Bank and Waterloo Holdings Ltd. She received an M.B.A. from INSEAD, the European Institute of Business  Administration, in Fontainebleau, France. Her B.A. degree is from Princeton University.
Johannesburg
Meg Osius (new)
The Course Director specializes in capital markets, risk management, and international project finance. She works with corporations, financial institutions, public agencies, law firms, and private equity investors. She has had extensive transactional experience in the oil, gas, power, transport, and telecom sectors.

She began her career at JP Morgan Chase Manhattan Bank, where she structured highly leveraged deals and project financings also advising clients on foreign exchange and other price risk management strategies. Before that she was responsible for evaluating the quality of the bank’s global loan portfolio as well as that of its newly acquired affiliates. In that role she had extensive experience with workout and distressed debt.

She has published articles in the business press and co-authored several self-study guides covering international project finance, trade and export finance, foreign exchange, and financial futures. The World Bank has published her articles on approaches to financial analysis in emerging markets.

Previously she was Chairperson of the Technical Advisory Panel (TAP) of the Public Private Infrastructure Advancement Fund (PPIAF) managed by the World Bank. The fund provides technical assistance to emerging market governments in order to encourage private involvement in infrastructure development. She is currently a Director of British Caribbean Bank and Waterloo Holdings Ltd. She received an M.B.A. from INSEAD, the European Institute of Business  Administration, in Fontainebleau, France. Her B.A. degree is from Princeton University.

Venue

London

Central London Hotel Venue

All courses are held at four or five star venues in Central London, Zone 1. We strive to provide you with a training environment of the highest quality, to ensure that the whole learning experience exceeds your expectations.

Your training venue will be confirmed by one of our course administrators approximately 3-4 weeks before the course start date.

Johannesburg

Johannesburg Hotel

This programme takes place on a non-residential basis at a central Johannesburg hotel. Non-residential course fees include training facilities, documentation, lunches and refreshments for the duration of the programme. Delegates are responsible for arranging their own accommodation, however, a list of convenient hotels (many at specially negotiated rates) is available upon registration.

Singapore

4-5 Star Hotel in Singapore

All of our courses are held in 4 – 5 star hotels, chosen for their location, facilities and level of service. You can be assured of a comfortable, convenient learning environment throughout the duration of the course.

Due to the variation in delegate numbers, we will send confirmation of the venue to you approximately 2 weeks before the start of the course. Course fees include training facilities, documentation, lunches and refreshments for the duration of the programme. Delegates are responsible for arranging their own accommodation, however, a list of convenient hotels (many at specially negotiated rates) is available upon registration.

Related Courses

Inhouse


 

Do you have five or more people interested in attending this course? Do you want to tailor it to meet your company's exact requirements? If you'd like to do either of these, we can bring this course to your company's office. It might even prove to be more cost effective.





Our Tailored Learning Offering

If you want to run this course at a location convenient to you or if you want a completely customised learning solution, we can help.

We produce learning solutions that are completely unique to your business and we’ll be here to support you every step of the way. From the initial consultancy through to evaluating the success of the full learning experience. We'll ensure you get the maximum return on your training investment.



We can offer any of our public courses delivered at your office or we can devise completely tailored solutions specialising in:


Complete a call back request to speak to a learning specialist or learn more about our offering

 

Agenda

Agendas are localised, please select your preferred location.

Day 1


Critical factors in project financing today


Why choose project finance?

  • Sponsor’s rationale
  • Lender’s criteria
  • Constructor’s objectives
  • Government’s roles
  • Institutions/investors

Best sectors and project types

  • Difficult sectors to avoid
  • Current trends

Stages in project finance

  • Time, team, costs
  • Information memorandum/project proposal
  • Credit/investment committee considerations

Workshop: case study/modelling team assignments

Power project – capital markets
Tollway – banks/bond
Oil and gas – political risk
Power – co-financing

Risk definitions/allocations

  • The 6 risk systems
  • The 5 structuring formats
  • The 16 risks to identify
  • The 174 structures to apply

Sector-specific risk profiles and structuring protocols

  • Oil and gas
  • Tollways/bridges/tunnels
  • Power/merchant
  • Ports/airports power railways
  • Water/waste water
  • Hospitals/prisons
  • Telecoms/satellites
  • Mining/metals
  • Renewable energy

Workshop: pick the risks; each team will select the top four risks and the structures that are needed in four recent cases.

Risk ‘metrics’

  • Basel II
  • Compliance measures

Day 2


Structuring and trade-offs


Due diligence

  • How to scope the 6 independent reviews
  • Fit to credit/investment approval
  • The “bankable” feasibility study
  • The project development plan

Why do projects go wrong? Lessons to be learnt from:

  • Eurotunnel/Eurodisney/Iridium
  • OrlyVAL/Dulles Greenway/NCA/Quintette

Key documentation aspects

  • The 19 participants
  • The 33 contracts


Contractual architecture – risk coverage

  • Concession agreements vs. BOO
  • Special purpose vehicles (the 5 types)
  • Operations/management (O&M) contracts
  • Turnkey construction contract
  • Delayed completion and systems performance insurances
  • Offtake/sales contracts
  • Indirect/third-party support agreements
  • Government guarantees
  • Dispute resolution methods

Funding documentation

  • Loan agreements
  • Joint venture/shareholder agreement
  • Security documentation
  • Assignment of contracts/insurances
  • Direct and common agreements
  • Offshore proceeds account
  • Swaps
  • Securitisation
  • Inter-creditor agreement/deed of priority

Funding sources

  • Debt
  • Equity
  • Leasing/leveraged leasing
  • Commodity-based

Ratings for project financings

  • Moodys/Standard & Poors/Fitch
  • Key differences with bank-driven deals
  • Covenants
  • Pricing
  • Default
  • Term
  • Structure
  • Voting

Role of the advisor

  • When to involve advisors
  • How to keep the costs and timetable down

Political risk structuring definitions

  • Terrorism questionnaire
  • The ‘classic’ 3 - war, inconvertibility, expropriation
  • The full set of 20 political risks
  • Application to equity too

Export credit agencies/bilateral agencies

  • US Eximbank/OPIC, US
  • EDC, Canada/KfW/Hermes/ECGD, UK/JBIC/NEXI
  • Tactics for approaching the ECAs

Multilateral agencies

  • World Bank
  • Multilateral Investment Guarantee Agency (MIGA)
  • International Finance Corp (IFC)
  • European Bank for Reconstruction and Development (EBRD)
  • Inter-American Development Bank (IDB)
  • Asian Development Bank (ADB)
  • How to approach the multilaterals

Private sources

  • AIG
  • Sovereign
     

Day 3


Credit criteria and cashflow modelling


Credit analysis

  • The investors’/financier’s/company treasurer’s measures

What model is needed for a project finance?

  • The model layout
  • Establishment of the key cases
  • Fit to the project risks/sensitivities
  • "Circularity is best"

Model designs

  • Design of the input sheet/data validation
  • Conventional: operations; capex; loan/tax routines

Project finance model types

  • Typical layouts
  • Drawdown routines/model periods (%, quarterly, overruns)
  • The 8 main repayment styles
  • Multi-tranche approaches
  • Reserve accounts
  • Debt service
  • Maintenance
  • Capex
  • Tax
  • Environmental
  • FX
  • Calculating liquidated damages/overrun/retention requirements

Sensitivity analyses modelling

  • How to choose sensitivities
  • Key ratio targets
  • Contrast to sponsors' IRR, NPV, valuation analyses
  • Dynamic what if?
  • Scenario manager
  • Graphical sensitivity techniques
  • Conditional formatting
  • Other tricks?

Build the course model

  • Design the necessary input sheet
  • Determine the loan amount required using different repayment techniques

Model auditing

  • 'Straight' Excel techniques
  • Advanced add-in styles

Day 4


Modelling project finance cashflows


Key inputs

  • Non-modelling assumptions
  • Cyclicality
  • The 5 breakeven techniques

Modelling key decision/credit criteria

  • Leveraged IRR
  • Annual debt service cover ratio
  • Principal cover
  • Loan life/project life PV ratio
  • Interest cover
  • Cash/equity lock-ups
  • Delay algorithms
  • Residual cover/cushion/ratios
  • Liquidated damages
  • Cash sweeps/mandatory prepayments

Modelling workshop

  • Modelling tactics
  • How to fiddle/finesse the model

Typical modelling errors

  • Discounting/escalation
  • Available cashflow
  • Reserves
  • Working capital
  • Replacement capital
  • EBITDA
  • CPI-based LLR/PLR
  • The danger of using unescalated models
  • Some handy tools to check model imputs

Sector modelling aspects

  • Power
  • Tollways
  • Telecoms
  • Satellites
  • Prisons/hospitals
  • Airport/ports
  • Water/waste water
  • Theme parks/stadiums
  • Railways Resources (oil and gas, mining)

Bidding contest using the course model - leading from the course model and the information memorandum update, decide whether you can improve on the currently offered project finance deal!
 

Day 5


Outlook for project finance


Case study presentations:
each team presents its allocated case with structures and solutions as well as cashflow sensitivities. Expert feedback on the deal architecture and risks.

Project finance as a competitive tool

  • How to integrate project financing into the bid

Practical case study: linking the tariff to the project finance structure.


Contract/tender bidding

  • “Real” turnkey construction contracts

Public private projects

  • The 7 variations
  • Tendering criteria
  • Trends/case examples

New horizons for projects and funding sources

  • “Green” funds
  • Emerging market funds
  • Infrastructure/development funds
  • Tax structures
  • Capital markets
  • Political risk enhancements
  • FX cover
  • Credit enhancements
  • Credit wraps/monolines
  • Weather/wind derivatives
  • Islamic project finance
  • Credit derivatives
  • Securitisation
  • CDOs/CLOs
  • Takeout architectures

Course summary & close

DAY 1 

Themes: Structuring Projects and Creating a Security Package; Oil and Gas Structures


Project Finance Overview

  • Current Challenges /Approaches
  • Who are the Players? Identifying and Allocating Risks
  • What Can Go Wrong?
  • Examples from 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: Using Cash Flow Modeling Software to Finance a Gas Processing 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.


DAY 2

Themes: Sources of Finance and Credit Enhancement; Financing Transportation and Other Infrastructure


Case Discussion

Legal Issues and Documentation

  • Legal Environment and Regulatory Conditions
  • Commercial Points and Legal Points in Various Project Structures:
    - Incorporated and Unincorporated Joint Ventures
    - Partnerships and Limited Partnerships
  • 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


Transportation Project Considerations

  • Ownership Structure
  • Outright and Partial Government Ownership
  • Long-Term Concessions and PPP structures like DBFO
  • Privatization of Seaports; Airport Financing
  • Exercise: Constructing a Risk Matrix for a Transport Project

Case Study: Airport Finance; Negotiating a Term Sheet

Participants will break into groups to work on this PPP project structure. Discussion will focus on project risks, their allocation through contracts, the mix of financing, cash flow projections. Also, rating agency considerations in evaluating the proposed financing structure.



DAY 3

Themes: More Financing Sources and Structuring Considerations; Power Project Transactions


Case Discussion

Using Capital Markets for Projects

  • 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

Leasing Applications

  • Leasing Applications in Projects
  • Evaluating Cost

Case Examples: Colombia and Brazil

Islamic Finance

  • Definitions, Principles, and Authoritative Sources
  • Structures: Murabaha, Istisna and Ijara
  • Examples of Petrochemical and Other Transactions


Conventional and Renewable Power

  • Market forces and the effect on electrical supply
  • Fragmentation of electricity generation
  • Gencos/transcos/discos
  • Merchant power plants (MPPs)
  • Rating agencies' analytical model
  • Various types of renewable energy projects
  • Comparing renewable to traditional fossil fuel burning plants
  • Government incentives for renewable energy projects


Case Study: Financing a Gas-fired Power Plant

Risk allocation among various project participants in a gas-fired cogeneration electricity and water desalination plan. Testing the project's cash flows under varying scenarios with a cash-flow simulation model. What are acceptable DSCR levels? Equity returns?

Self-test and Wrap-up 

DAY 1 

Themes: Structuring Projects and Creating a Security Package; Oil and Gas Structures


Project Finance Overview

  • Current Challenges /Approaches
  • Who are the Players? Identifying and Allocating Risks
  • What Can Go Wrong?
  • Examples from 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: Using Cash Flow Modeling Software to Finance a Gas Processing 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.


DAY 2

Themes: Sources of Finance and Credit Enhancement; Financing Transportation and Other Infrastructure


Case Discussion

Legal Issues and Documentation

  • Legal Environment and Regulatory Conditions
  • Commercial Points and Legal Points in Various Project Structures:
    - Incorporated and Unincorporated Joint Ventures
    - Partnerships and Limited Partnerships
  • 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


Transportation Project Considerations

  • Ownership Structure
  • Outright and Partial Government Ownership
  • Long-Term Concessions and PPP structures like DBFO
  • Privatization of Seaports; Airport Financing
  • Exercise: Constructing a Risk Matrix for a Transport Project

Case Study: Airport Finance; Negotiating a Term Sheet

Participants will break into groups to work on this PPP project structure. Discussion will focus on project risks, their allocation through contracts, the mix of financing, cash flow projections. Also, rating agency considerations in evaluating the proposed financing structure.



DAY 3

Themes: More Financing Sources and Structuring Considerations; Power Project Transactions


Case Discussion

Using Capital Markets for Projects

  • 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

Leasing Applications

  • Leasing Applications in Projects
  • Evaluating Cost

Case Examples: Colombia and Brazil

Islamic Finance

  • Definitions, Principles, and Authoritative Sources
  • Structures: Murabaha, Istisna and Ijara
  • Examples of Petrochemical and Other Transactions


Conventional and Renewable Power

  • Market forces and the effect on electrical supply
  • Fragmentation of electricity generation
  • Gencos/transcos/discos
  • Merchant power plants (MPPs)
  • Rating agencies' analytical model
  • Various types of renewable energy projects
  • Comparing renewable to traditional fossil fuel burning plants
  • Government incentives for renewable energy projects


Case Study: Financing a Gas-fired Power Plant

Risk allocation among various project participants in a gas-fired cogeneration electricity and water desalination plan. Testing the project's cash flows under varying scenarios with a cash-flow simulation model. What are acceptable DSCR levels? Equity returns?

Self-test and Wrap-up 

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