Advanced Project Finance Workshop

5 days 5-9 Oct 2015, Istanbul £3,730.00 Download brochure Add to basket
4 days 19-22 Oct 2015, Seoul $6,150.00 Download brochure Add to basket
5 days 9-13 Nov 2015, South of England £6,145.00 + VAT* Download brochure Add to basket
5 days 18-22 Jan 2016, Johannesburg £3,745.00 Download brochure Add to basket

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Overview

This unique 5-day training course examines the latest structuring, funding and cashflow modelling techniques.


On completion of the course you will be able to:

  • Analyse specific case studies, risk profiles and structuring protocols
  • Analyse funding sources and credit criteria
  • Simulate, arrange and document project financings
  • Construct a project finance cashflow model
  • Capitalise on the new horizons for projects and funding sources

Course overview:

This course will cover all the critical factors in project financing today, from identifying which projects to finance, to the negotiation tactics employed to achieve the best deals. You will find out how to spot the pitfalls in project finance structures and identify the risks, credit criteria and funding. Through practical exercises you will learn sector specific modelling and structuring protocols and how to build a cashflow model from scratch. The course also covers political risk structuring and tailoring the project to suit the funding. The programme will finish by considering the future direction and developments in the sector and how to best take advantage of these. 

Methodology:

  • You will receive pre-course reading notes and case study material in analysis, negotiation and structuring. Individual project finance cases will be pre-assigned.
  • Comprehensive session notes, computer models and resource material will be a key part of the teaching methodology to form an excellent balance between formal lectures and hands-on participation.

Prerequisites:

  • This advanced course is suitable for all those who have previous experience in carrying out project financing e.g. project/structured finance executives from banks, multinationals and multilaterals.
  • Delegates are likely to have a minimum of 3 years’ hands-on project finance experience and ideally you should know about NPVs, IRRs and cashflow analysis and should also have a basic understanding of business law.

Supported by:

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.

South of England

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.

Johannesburg

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.

Istanbul

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.

Seoul

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.

Venue

Istanbul

Istanbul Hotel

This programme takes place on a non-residential basis in a central Istanbul 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.

 


 

Seoul

4-5 Star Hotel in Seoul

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.

South of England

Residential venue within an hour of London

This programme takes place on a residential basis at a training facility within an hour of London.

Our residential courses offer a number of important benefits:

  • They allow delegates to focus on improving their skills away from the many distractions of their office
  • Delegates are provided with the ideal setting for interactive group work and study sessions
  • They provide a perfect opportunity outside of the training room for sharing experiences and networking with other delegates from some of the world's major banks and financial institutions
  • And finally at the end of a day's study the delegates can relax (or do extra study), as there is no travelling for them to do

Residential course fees include:

  • All tuition, teaching and equipment
  • Exclusive programme material to take away for future reference
  • Hotel accommodation for the duration of the course
  • Breakfast, lunch and dinner

All our residential venues are within easy travelling distance of the major London airports and are convenient for travel into central London.

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.

Related Courses

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
    • Mega-Infrastructure/ResourceS
  • Risk definitions/allocations
    • The 6 risk systems
    • The 5 structuring formats
    • The 16 risks to identify
    • The 184 structures to apply
  • Sector-specific risk profiles and structuring protocols
    • Oil and gas
    • Tollways/bridges/tunnels
    • Power/merchant power railways
    • Ports/airports
    • LNG/Shipping
    • 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 7 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-Ipex/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

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

Module 1: Advanced Project Finance Workshop

Day 1

Best Sectors and Project Types

  • Sector Preferences in Project Finance and Why
  • Difficult sectors to avoid
  • Which trends are current?

The Reasons to Choose Project Finance

  • Sponsor's rationale
  • Lender's criteria
  • Constructor's objectives
  • Government's role(s)
  • Institutions / Investors

Two Types of Project Finance

  • The Completion Test as the Type 1: Option Exercise/Risk Transfer
  • The Contractor’s Package - Type 2: Liquidated Damages + Delay-in-Startup Insurance

Stages in Project Finance

  • Time, team, costs
  • Credit/ Approval Memorandum
  • Impact when using ECAs/MLAs

Risk & Structuring

  • The 7 Risk Systems
  • The 5 Structuring Formats
  • The 16 Risks to Identify
    • Operating
      • Cost
      • Technical
      • Management
    • Completion
    • Political
    • Infrastructure
    • Market
    • Environmental
    • Inputs
    • Sponsor
    • Force Majeure
    • Foreign Exchange
    • Engineering
    • Syndication
    • Interest / Funding
    • Legal

The 81 Structures to Apply

Day 2

The 16 Risks and Structuring (continues)

Due Diligence

  • How to Scope the 7 Independent Reviews
  • Traffic Studies
  • Fit to Investment/Credit approval
  • The ‘Bankable’ Feasibility Study
  • How to Do the Construction-Cost Audit
  • The Project Development Plan

Role of Advisor(s)

  • Different Types of Advisors
  • When to involve advisors
  • How to keep the costs down

Funding Sources

  • Debt
    • Local currency
    • Cross-border / Defeasance
    • Mezzanine
    • CPI-linked
  • Equity
    • Preference capital
    • Convertibles
    • IPOs/floats for projects
  • Leasing/Leveraged leasing
  • Commodity-based
    • Offtake contracts
    • Derivatives
    • Production payments
  • Capital Markets
    • 144A
    • 'Commonwealth'
      • CPI-linked
  • Ratings for project financings
    • How to get one from Moody's / Standard & Poor's / Fitch
    • How can Project Finance pierce the 'sovereign ceiling'?
  • Why Projects Go Wrong?
    • Will we ever learn from?
    • Eurotunnel
    • Eurodisney
    • Orly VAL
    • Iridium
    • Dulles Greenway

Document Structuring

  • Key Documentation Aspects
    • The 21 Participants
    • The 33 Contracts
  • Contractual Architecture – Risk Coverage
    • Concession Agreements vs BOO
      • Multiple BOO integration
    • Special Purpose Vehicles (The 5 types)
    • Operations/Management (O&M) Contracts
    • Turnkey Construction Contract
    • Delayed Completion and Systems Performance Insurances
      • Owner-controlled Insurance Program ("OCIP")
    • Offtake/Sales/Throughput
    • Indirect/Third-party Support Agreements
    • Comfort Letters
    • Government Guarantees
    • Dispute Resolution Methods
      • Expert-resolution
      • Arbitration
      • ADR
  • Funding Documentation
    • Loan Agreements
    • Joint Venture/Shareholder Agreement
    • Security documentation
    • Assignment of Contracts/Insurances
    • Direct and Common Agreements
    • Offshore Proceeds Account
    • Swaps
    • Securitization
    • Inter-creditor Agreement/Deed of Priority

Day 3 - Team 'Red' Cases – top 4 risks

Risk Review
Each team will make a brief presentation on the top four (4) risks selected for four (4) Project-Finance cases - C.R.Tinsley, Project Finance in Asia Pacific: Practical Case Studies, 2002 (16 projects from which to select)

Credit Review

The Investors' Measures

  • Internal Rate of Return / Yield
  • Payback: Leveraged / Unleveraged
  • Net Present Value
  • Earnings per Share

The Financier’s Measures

  • Debt Service Covers: Before / After Tax
  • Loan Life PV Ratio
  • Reserve Life PV Ratio
  • Reserve 'Tail'

The Company Treasurer's Measures

  • Liquidity / Turnover
  • Balance Sheet
  • Profit & Loss
  • Return on Capital / Investment
  • Discount Rates

Credit Analysis

  • Impact of leverage
  • Calculations for global coverage ratios
  • Calculate liquidated damages/overrun/retention requirements

Credit Factors

  • How to choose sensitivities
  • Key ratio targets
  • Contrast to Sponsor’s IRR, NPV, Valuation Analyses

Political Risk Structuring

  • Definitions
    • Terrorist questionnaire
    • The classic three: War, inconvertibility, expropriation
    • The full set of twenty two
    • Application to equity too
  • Export Credit Agencies/Bilateral agencies
    • US Eximbank (Project Finance Division)
    • OPIC, USA
    • EDC, Canada
    • KfW-Ipex/Hermes
    • ECGD, UK
    • JBIC/NEXI
    • EFIC
    • Tactics for approaching the ECAs
  • Multilateral Agencies
    • World Bank
    • Multilateral Investment Guarantee Agency (MIGA)
    • International Finance Corp (IFC)
  • How to Approach the Multilaterals
    • IFC “B” Loans
    • World Bank Partial Risk/Credit facilities
    • Local currency facilities
  • Private PRI Sources
    • AIG
    • Sovereign

Day 4

Team Roadshows

  • M3

This infrastructure/traffic case is one of the most advanced Project Financing ever done and includes banks and bond funding. A detailed model assists in the financial analysis while team members need to justify the traffic assumptions and the overall structure. This brings together many course elements on credit, risk, structures, funding, and documentation. Why would banks ever give the bondholders pre-completion credit enhancement?

  • Louise

This BOT project pioneered the access to the 144A private-placement project-finance bond market. Heavy sponsor involvement achieved a remarkable deal; however, team members will have to find the strengths and weaknesses behind such sponsor commitment.

  • Zanda

This is a very high-leverage Project-Finance case which is notable for weak sponsor support. It will stretch the team’s understanding of political-risk structuring and credit analysis. Why is such a simple financial model acceptable in this case? A detailed risk-by-risk review will need to be analysed.

  • FMG

This project was able to raise US$2.05 billion before startup on the basis that the core project was US$400 million – the rest is infrastructure. Incredibly, this 144A capital raising includes US$ 889 million in standby/overrun facilities. Learn how the hedge funds catalysed this important deal.

Four (4) teams will be selected in advance by answering a questionnaire that will be emailed back to the course director. The teams will work on the cases during the duration of the course in break-out rooms. These four (4) cases will be presented as ‘Roadshows’ on the morning of Day 4. The course director will give expert feedback on both the team presentation and the delegate questioning.

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

Outlook

New Horizons for projects and funding sources

  • "Green" funds
  • Emerging-Market funds
  • Infrastructure / Development funds
  • Capital Markets
    • Political Risk Enhancements
    • FX Cover
  • Credit Enhancements
    • Credit Wraps
  • Islamic Project Finance
  • CDOs/CLOs
  • Takeout Architectures

Practical case study: Croydon Tramlink, UK

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

 
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 
    • Mega-Infrastructure/ResourceS
  • Risk definitions/allocations
    • The 6 risk systems
    • The 5 structuring formats
    • The 16 risks to identify
    • The 184 structures to apply
  • Sector-specific risk profiles and structuring protocols
    • Oil and gas
    • Tollways/bridges/tunnels
    • Power/merchant power railways
    • Ports/airports
    • LNG/Shipping
    • 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 7 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-Ipex/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

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 

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