Advanced Project Finance Workshop

0 days Contact us for dates, London UK £4,895.00 + VAT* Download brochure Add to basket
0 days Contact us for dates, London UK £4,895.00 + VAT* Download brochure Add to basket
3 days 5-7 Dec 2016, Hong Kong Hong Kong $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.

Hong Kong
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

Hong Kong

4-5 Star Hotel in Hong Kong

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.

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.

Related Courses

Inhouse

We can bring this course to your company's office.

If you simply 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. Our tailored learning solutions are designed specifically for your organisation’s needs.

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.

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Agenda

Agendas are localised, please select your preferred location.

DAY 1            Themes: Structuring Projects and Creating a Security Package; Cashflow Analysis  

 

AM                 Project Finance Overview

 

Current Challenges for Project Finance

Who are the Players? Identifying and Allocating Risks

What Can Go Wrong?

Examples: Oil and Gas Pipeline Projects  

 

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

 

PM                  Cashflow Forecasting: View of the Creditors

 

Financial Modeling and Cash Flow Analysis

Common Metrics: DSCR and LLCR, Project Life Coverage

Forecasting Techniques and Limitations

Probabilistic vs. Non-Probabilistic Model-Building

                                                                                                                       

Case Study: Using Cash Flow Modeling Software to Assess Finance for a Gas Processing Facility

 

Participants break into small groups to prepare a case study that analyzes a gas processing project.  A computer simulation will be used to model cashflows. Groups will present their solutions.

 

 

DAY 2                        Themes: Documentation and Sources of Finance and Credit Enhancement;  Financing Infrastructure

 

AM                             Cashflow Analysis: Equity Considerations

 

 IRR, NPV, Investment Horizons

Approaches to Evaluating the Cost of Capital

                                    Project Returns vs. Equity Returns

 

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

Developing a Term Sheet

            Limiting Recourse

            Tax Gross Up Issues

            Market Interruption

            Reps and Warranties

            Conditions Precedent

            Covenants Including MAC Clauses

            Hedging Requirements                 

 

PM                              Credit Enhancement with Export Credit Agencies (ECAs)

                         

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

 

Syndicated Bank 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

Inter-creditor Issues

                         

PPP and Projects in the Transportation Sector

What is PPP?

            Outright and Partial Government Ownership

            Long-Term Concessions vs “Availability” Models

            Road and Rail Finance

            Private Operation of Seaports and Airports

            Constructing a Risk Matrix for a Transport Project

           

 

 

DAY 3            Themes:  Financing Sources

 

AM                 Case Discussion     

 

Case Study: Airport Finance; Negotiating a Term Sheet

 

Participants will break into groups to work on this transport 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.

 

Accessing Capital Markets for Project Bonds

 

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

 

PM                  Islamic Finance

 

Structures, Authorities and Applications

Ijara, Istisna and Sukuk

Examples

 

                        Financing Independent Power Transactions (IPPs)

 

                        Sector Liberalization and the Emergence of IPPS

                                    (Gencos, Discos, Transcos)

                        Base–load facilities vs Peakers

Fuel Sources and Heat Rates

Comparative Costs

Contracted Sales vs Merchant Plants

 

 

DAY 4            Themes: Leasing; Derivatives; Development Agencies; Power Projects

 

AM                Leasing Applications in Projects

 

Objectives

Evaluating Cost

Examples

 

Derivatives for Project Risk Management

 

Financial Price Movements Today: Volatility and Risk

Using Interest Rate and Currency Swaps to Manage Risk in Projects

Options: Caps, Floors and Collars

Commodity-Linked Derivatives and Securities

Case:  Interest Rate and Currency Risk Management for a Power Project

 

                      Development Agencies and Political Risk Enhancement

 

  Official Political Risk Enhancement (ECAs, Development Banks and Others)

  Private Sources of Political Risk Insurance

   

PM                  Case Study: Financing a Combined Cycle Power Plant

 

Risk allocation among various project participants in a gas-fired electricity facility. Testing the project's cash flows under varying scenarios with a cash-flow simulation model. What are acceptable DSCR levels?  Acceptable equity returns?

 

Self-test

 


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

Why us


We have a combined experience of over 60 years providing learning solutions to the world’s major organisations and are privileged to have contributed to their success. We view our clients as partners and focus on understanding the needs of each organisation we work with to tailor learning solutions to specific requirements.

We are proud of our record of customer satisfaction. Here is why you should choose us to help you achieve your goals and accelerate your career:

  • Quality – our clients consistently rate our performance ‘excellent’ or ‘outstanding’. Our average overall score awarded to us by our clients is nine out of ten.
  • Track record – we have delivered training solutions for 95% of worlds’ top 100 banks and have trained over 250,000 professionals.
  • Knowledge – our 150 strong team of industry specialist trainers are world leading financial leaders and commentators, ensuring our knowledge base is second to none.
  • Reliability – if we promise it, we deliver it. We have delivered over 20,000 events both in person and online, using simultaneous translation to delegates from over 180 countries.
  • Recognition – we are accredited by the British Accreditation Council and the CPD Certification Service. In an independent review by Feefo we scored 96% on service and 95% on product