International Project Finance & Cashflow Modelling

5 days 20-24 Mar 2017, Paris France 6,020.00 + VAT* Download brochure Add to basket
5 days 3-7 Apr 2017, New York United States $7,140.00 Download brochure Add to basket
5 days 15-19 May 2017, Hong Kong Hong Kong $6,800.00 Download brochure Add to basket
5 days 16-20 Oct 2017, London UK £5,275.00 + VAT* Download brochure Add to basket
5 days 13-17 Nov 2017, New York United States $7,140.00 Download brochure Add to basket

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Overview

This 5-day program teaches participants how to analyse project financing opportunities. Delegates will learn how to properly structure transactions to minimize risks and improve the prospects for future strong performance, both in existing portfolios and new transactions.

By the program's conclusion participants in this program will have developed a framework for recognizing and analysing qualitative and quantitative project risks when financing green field projects as well as facility upgrades. Numerous examples of projects from around the world are employed to ensure understanding and application of concepts. Detailed breakout cases are drawn from various industrial sectors including oil and gas, conventional and renewable energy, transportation and other infrastructure. Participants learn how excel models are used to assess project debt capacity, return on investment, and other metrics common to attractive deals.

Besides discussing many recent examples of financing structures attractive to Banks, Institutional Investors, and Equity providers, careful attention is paid to credit enhancers such as Export Credit Agencies, Development Banks, Private insurers, mon-lines and others.

Cashflow Modelling

The program's fifth day session is a stand-alone cash flow modelling workshop. Using excel software, participants create a model for an LNG Plant suitable for examining project debt capacity as well as return on investment.

Who should attend

The courses will be valuable to professionals in the following areas:
  • Bankers/Investment Bankers
  • Project Finance Modellers
  • 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.

Paris
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.
New York
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.
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.
London
Meg Osius

The course director designs and delivers executive level training sessions as well as providing consulting services to a wide variety of organizations worldwide. Specializing in international project finance, capital markets, and risk management, she works with corporate investors, private and development banks, equipment suppliers, law firms etc. to structure viable financing packages for green-field projects and facility upgrades in the power, oil and gas, transport, social services and telecom sectors. Prior to establishing her own firm, she was a banker at JP Morgan Chase Bank where she structured international project transactions and advised clients on risk management.

The course director has published articles in the business press as well as guides covering international project finance, trade and export finance, foreign exchange, and risk management, as well as approaches to credit and financial analysis in emerging markets. She is a primary speaker in a series of video sessions created by the World Bank covering Sound Banking Principles in Emerging Markets.

The course director was Chair of the Technical Advisory Panel of the Public Private Infrastructure Advancement Fund (PPIAF). The fund supports technical assistance in emerging markets to encourage private involvement in infrastructure development. 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.

Guest Speaker:

The guest speaker, Principal of BJM International and BJM Solar Energy Finance, advises on International Project Finance transactions, primarily in the Renewable Energy Sector in Emerging Markets. Until recently, he was Managing Director for International Project Finance and Business Development at SunEdison, a wholly-owned subsidiary of MEMC Electronic Materials where he was responsible for raising debt and equity outside North America. Previously, he was Managing Director and Deputy General Manager at Nord/LB NY, responsible for Corporate, Project, Export and Trade Finance Origination activities in the Americas. Specializing in financing environmental and renewable projects, his team supported over 5000MW of renewable power projects in North America alone and ranked among the top 5 project finance lenders to the sector in the Americas. Prior to 1999, he was Director of Project Finance & Development at Raytheon Engineers & Constructors, responsible for arranging debt and equity financings for Hydrocarbon, Power, and Infrastructure projects. Before that he spent 20 years with various financial institutions, specializing in international finance. At Societe Generale, he was Vice President and Manager of the US Export Finance Group. At JP Morgan Chase where he spent 10 years, he was responsible for project financing in emerging markets with the support of US Eximbank and OPIC. Earlier in his career, the guest speaker was based in Tunis, responsible for Chase’s Trade finance activities in North Africa.

He received his MBA in finance from George Washington University and a Bachelor of Science from Georgetown University’s School of Business Administration.

Venue

Paris

Centrally located hotel in Paris

This programme takes place on a non-residential basis at a hotel in central Paris. 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.

New York

New York Hotel

This program takes place on a non-residential basis at a New York 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.

As with all programmes on-site administrators are with you throughout the programme to ensure smooth administration and group interaction.

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


 

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. You could even save up to 50% on the cost of sending delegates to a public course.

To find out more about running this course in-house:





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. We'll guide you through the whole process, from the initial consultancy to evaluating the success of the full learning experience. Our learning specialists 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:


Read more about our offering or complete a call back request to speak to a learning specialist.

 

Agenda

Agendas are localised, please select your preferred location.

Day 1

Themes: Structuring Projects and Creating a Security Package; Discovering the Most Efficient Sources of Finance;
Cashflow modelling.
Project Finance Today
  • Current challenges in Southern Africa for project finance
  • Who are the players?
  • Identifying and allocating risks
  • What can go wrong?

Examples: Financing a pipeline, tankers; other oil and gas projects.

  • PPP and project finance: financing infrastructure
  • BOO, BOT, BOOT, DBFO and other approaches
  • Private investment in public infrastructure

Examples: Power projects and toll roads.

Projects and Risk Identification

  • Risks in development
  • Construction and operating risks
  • Feedstock and supply
  • Market risks
  • Environmental risks
  • Financial risks
  • Political and regulatory risks

Examples: Gas field development and infrastructure, oil refineries, LNG, Electricity plants.

Sources of Finance: Financing Checklist

  • Domestic and foreign banks
  • Bond markets
  • Development banks, ECAs and other official creditors
  • Leasing
  • Islamic finance
  • Sources of equity

Day 1 – cont.

Cashflow Modelling Approaches

  • Financial modelling and cash flow analysis
  • The 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

Case Study: Financing a Gas Processing Plant.

Participants break into small groups to prepare a case study. A computer simulation will be used to model cashflows. Groups will present their solutions.
End of Day 1

Day 2

Themes: Legal Issues; Bank Finance; Export Credit Agencies; PPP for Transportation and other Infrastructure Projects
Case discussion
  • Legal Issues in Project Finance
  • Legal environment and regulatory conditions
  • Commercial points and legal points in various projects
  • SPV Structures
  • 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

Sources of Finance: Bank Loans

  • Banks and club loans
  • Syndicated loan financing
  • What security do banks want?
  • Market flex clauses
  • “Mini-perms”
  • Inter-creditor issues

Export Finance Techniques (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

Day 2 – cont.

  • PPP: Roads, Railroads, Airports, Ports and Other Transportation Projects
  • Public Private Partnerships (PPP) Principles
  • Roles for the Public and Private Sector
  • Different Structures and Degrees of Private Participation
  • Outright and partial government ownership
    - Long-term concessions and DBFO
    - Privatization of seaports; airport financing

Exercise: Constructing a risk matrix

Case Study: Airport finance; Negotiating a term sheet. (Could be a roadway case or a railroad)

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, as well as rating agency considerations in evaluating the proposed financing structure.

End of Day 2

Day 3

Themes: Capital Market Issuance for Projects

Using Capital Markets

  • 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 Structures

  • Murabaha, Istisna and Ijara in Projects

Examples

Leasing

  • Leveraged Leases
  • Advantages

Liberalizing Power Markets

  • Market forces and the effect on electrical supply
  • Fragmentation of electricity generation
  • Gencos/Transcos/Discos
  • Merchant power plants (MPPs)
  • Rating agencies' analytical model

Renewable Energy Projects

  • Growth of the market and various types of renewable energy projects
  • Comparing renewable to traditional fossil fuel burning plants
  • Project economics
  • What is driving the investment?
  • Government incentives in various countries

Case Study: Financing a Gas-fired Power Plant
Risk allocation among various project participants to finance and construct a power plant. Testing the project's cash flows under varying scenarios with a cash-flow simulation model. What are acceptable DSCR levels? What returns does equity look for?
End of Day 3

Day 4

Themes: Risk Management with Derivatives, Development Agencies, Funding Power Projects

 
Price Volatility and Risk Management with Derivatives in Projects

  • Financial price movements today: volatility and risk
  • Commodity-linked derivatives and securities
  • Using interest rate and currency swaps to manage risk in projects
  • Options: caps, floors and collars

Roles for Development Banks and Agencies
        - World Bank Group
        - Regional multilateral development banks (ADB, IADB, EBRD, EIB, 
        - Islamic Development Bank, etc)
        - Bilateral agencies (FMO, DEG, OPIC, Proparco, etc.)

Water Infrastructure

  • Special features of limited recourse projects in water and sanitation
  • Array of structures: Service Agreements Leasing, BOT, Privatization
  • Who are the players? Investors and lenders?
  • Desalination and electricity projects
  • Case examples and PPP transactions

Case Study: Water Treatment facility
Participants will break into groups to prepare a case study concerned with financing a wastewater treatment plant in Latin America

Social Infrastructure 

  • Financing Hospitals, Schools, Prisons, Others
  • Concessions and Contract Terms
  • Risk Evaluation and Allocation
  • Monitoring Requirements

Self-Test and End of Program

Introduction to Cashflow Modeling Session Day 5:
Ras Laffan LNG plant
End of Day 4

Day 5

Themes: Modelling Workshop 


Participants will spend a day building a model for an LNG facility. They will assess a wide range of scenarios in order to test a limited-recourse financing package for debt capacity and suitability for investment. With discussion of common approaches to modeling with Excel, “dos’ and ‘don’ts” as well as the practical use models for negotiations.

Modeling Workshop Overview: Objectives and Approaches

  • Constructing a Model / Common Myths
  • Variations by Project Type

Structuring the Model and Organizing the Data to Create a Cashflow Statement

  • Developing the Assumptions Page
  • Construction Costs and Timing
  • Operating Cost, Plant Capacity Usage, Fixed and Variable Costs
  • Reinvestment, Plant Expansion, Productivity Shifts

Developing the Profit and Loss and Balance Sheet

  • Factoring in Reserves
  • Considering Currencies
  • Tax Calculations

Financing Section

  • Equity First or Pro Rata
  • Manually Designed Equity Subscription
  • Draw-down of Debt Linked to Specific Contracts or Expenditures or in a Hierarchy

Ratios and Sensitivity Analysis: Objectives and Limitations

  • Measuring Debt Capacity and Investor Return
  • Using Modelling Output for Initial Project Vetting
  • Supporting on-going Negotiations

Summary and Wrap-up of Modeling Workshop

End of Program

Day 1

Themes: Structuring Projects and Creating a Security Package; Discovering the Most Efficient Sources of Finance;
Cashflow modelling.

Project Finance Today
  • Current challenges in Southern Africa for project finance
  • Who are the players?
  • Identifying and allocating risks
  • What can go wrong?

Examples: Financing a pipeline, tankers; other oil and gas projects.

  • PPP and project finance: financing infrastructure
  • BOO, BOT, BOOT, DBFO and other approaches
  • Private investment in public infrastructure

Examples: Power projects and toll roads.

Projects and Risk Identification

  • Risks in development
  • Construction and operating risks
  • Feedstock and supply
  • Market risks
  • Environmental risks
  • Financial risks
  • Political and regulatory risks

Examples: Gas field development and infrastructure, oil refineries, LNG, Electricity plants.

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 Modelling Approaches

  • Financial modelling and cash flow analysis
  • The 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

Case Study: Financing a Gas Processing Plant.

Participants break into small groups to prepare a case study. A computer simulation will be used to model cashflows. Groups will present their solutions.
End of Day 1

Day 2

Themes: Legal Issues; Bank Finance; Export Credit Agencies; PPP for Transportation and other Infrastructure Projects
Case discussion
  • Legal Issues in Project Finance
  • Legal environment and regulatory conditions
  • Commercial points and legal points in various projects
  • SPV Structures
  • 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

Sources of Finance: Bank Loans

  • Banks and club loans
  • Syndicated loan financing
  • What security do banks want?
  • Market flex clauses
  • “Mini-perms”
  • Inter-creditor issues

Export Finance Techniques (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

 

  • PPP: Roads, Railroads, Airports, Ports and Other Transportation Projects
  • Public Private Partnerships (PPP) Principles
  • Roles for the Public and Private Sector
  • Different Structures and Degrees of Private Participation
  • Outright and partial government ownership
    - Long-term concessions and DBFO
    - Privatization of seaports; airport financing

Exercise: Constructing a risk matrix

Case Study: Airport finance; Negotiating a term sheet. (Could be a roadway case or a railroad)

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, as well as rating agency considerations in evaluating the proposed financing structure.

End of Day 2

Day 3

Themes: Capital Market Issuance for Projects

Using Capital Markets

  • 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 Structures

  • Murabaha, Istisna and Ijara in Projects

Examples

Leasing

  • Leveraged Leases
  • Advantages

Liberalizing Power Markets

  • Market forces and the effect on electrical supply
  • Fragmentation of electricity generation
  • Gencos/Transcos/Discos
  • Merchant power plants (MPPs)
  • Rating agencies' analytical model

Renewable Energy Projects

  • Growth of the market and various types of renewable energy projects
  • Comparing renewable to traditional fossil fuel burning plants
  • Project economics
  • What is driving the investment?
  • Government incentives in various countries

Case Study: Financing a Gas-fired Power Plant
Risk allocation among various project participants to finance and construct a power plant. Testing the project's cash flows under varying scenarios with a cash-flow simulation model. What are acceptable DSCR levels? What returns does equity look for?
End of Day 3

Day 4

Themes: Risk Management with Derivatives, Development Agencies, Funding Power Projects

 
Price Volatility and Risk Management with Derivatives in Projects

  • Financial price movements today: volatility and risk
  • Commodity-linked derivatives and securities
  • Using interest rate and currency swaps to manage risk in projects
  • Options: caps, floors and collars

Roles for Development Banks and Agencies
        - World Bank Group
        - Regional multilateral development banks (ADB, IADB, EBRD, EIB, 
        - Islamic Development Bank, etc)
        - Bilateral agencies (FMO, DEG, OPIC, Proparco, etc.)

Water Infrastructure

  • Special features of limited recourse projects in water and sanitation
  • Array of structures: Service Agreements Leasing, BOT, Privatization
  • Who are the players? Investors and lenders?
  • Desalination and electricity projects
  • Case examples and PPP transactions

Case Study: Water Treatment facility
Participants will break into groups to prepare a case study concerned with financing a wastewater treatment plant in Latin America

Social Infrastructure 

  • Financing Hospitals, Schools, Prisons, Others
  • Concessions and Contract Terms
  • Risk Evaluation and Allocation
  • Monitoring Requirements

Self-Test and End of Program

Introduction to Cashflow Modeling Session Day 5:
Ras Laffan LNG plant
End of Day 4

Day 5

Themes: Modelling Workshop 


Participants will spend a day building a model for an LNG facility. They will assess a wide range of scenarios in order to test a limited-recourse financing package for debt capacity and suitability for investment. With discussion of common approaches to modeling with Excel, “dos’ and ‘don’ts” as well as the practical use models for negotiations.

Modeling Workshop Overview: Objectives and Approaches

  • Constructing a Model / Common Myths
  • Variations by Project Type

Structuring the Model and Organizing the Data to Create a Cashflow Statement

  • Developing the Assumptions Page
  • Construction Costs and Timing
  • Operating Cost, Plant Capacity Usage, Fixed and Variable Costs
  • Reinvestment, Plant Expansion, Productivity Shifts

Developing the Profit and Loss and Balance Sheet

  • Factoring in Reserves
  • Considering Currencies
  • Tax Calculations

Financing Section

  • Equity First or Pro Rata
  • Manually Designed Equity Subscription
  • Draw-down of Debt Linked to Specific Contracts or Expenditures or in a Hierarchy

Ratios and Sensitivity Analysis: Objectives and Limitations

  • Measuring Debt Capacity and Investor Return
  • Using Modelling Output for Initial Project Vetting
  • Supporting on-going Negotiations

Summary and Wrap-up of Modeling Workshop

End of Program

Day 1

Themes: Structuring Projects and Creating a Security Package; Discovering the Most Efficient Sources of Finance;
Cashflow modelling.
Project Finance Today
  • Current challenges in Southern Africa for project finance
  • Who are the players?
  • Identifying and allocating risks
  • What can go wrong?

Examples: Financing a pipeline, tankers; other oil and gas projects.

  • PPP and project finance: financing infrastructure
  • BOO, BOT, BOOT, DBFO and other approaches
  • Private investment in public infrastructure

Examples: Power projects and toll roads.

Projects and Risk Identification

  • Risks in development
  • Construction and operating risks
  • Feedstock and supply
  • Market risks
  • Environmental risks
  • Financial risks
  • Political and regulatory risks

Examples: Gas field development and infrastructure, oil refineries, LNG, Electricity plants.

Sources of Finance: Financing Checklist

  • Domestic and foreign banks
  • Bond markets
  • Development banks, ECAs and other official creditors
  • Leasing
  • Islamic finance
  • Sources of equity

Day 1 – cont.

Cashflow Modelling Approaches

  • Financial modelling and cash flow analysis
  • The 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

Case Study: Financing a Gas Processing Plant.

Participants break into small groups to prepare a case study. A computer simulation will be used to model cashflows. Groups will present their solutions.
End of Day 1

Day 2

Themes: Legal Issues; Bank Finance; Export Credit Agencies; PPP for Transportation and other Infrastructure Projects
Case discussion
  • Legal Issues in Project Finance
  • Legal environment and regulatory conditions
  • Commercial points and legal points in various projects
  • SPV Structures
  • 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

Sources of Finance: Bank Loans

  • Banks and club loans
  • Syndicated loan financing
  • What security do banks want?
  • Market flex clauses
  • “Mini-perms”
  • Inter-creditor issues

Export Finance Techniques (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

Day 2 – cont.

  • PPP: Roads, Railroads, Airports, Ports and Other Transportation Projects
  • Public Private Partnerships (PPP) Principles
  • Roles for the Public and Private Sector
  • Different Structures and Degrees of Private Participation
  • Outright and partial government ownership
    - Long-term concessions and DBFO
    - Privatization of seaports; airport financing

Exercise: Constructing a risk matrix

Case Study: Airport finance; Negotiating a term sheet. (Could be a roadway case or a railroad)

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, as well as rating agency considerations in evaluating the proposed financing structure.

End of Day 2

Day 3

Themes: Capital Market Issuance for Projects

Using Capital Markets

  • 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 Structures

  • Murabaha, Istisna and Ijara in Projects

Examples

Leasing

  • Leveraged Leases
  • Advantages

Liberalizing Power Markets

  • Market forces and the effect on electrical supply
  • Fragmentation of electricity generation
  • Gencos/Transcos/Discos
  • Merchant power plants (MPPs)
  • Rating agencies' analytical model

Renewable Energy Projects

  • Growth of the market and various types of renewable energy projects
  • Comparing renewable to traditional fossil fuel burning plants
  • Project economics
  • What is driving the investment?
  • Government incentives in various countries

Case Study: Financing a Gas-fired Power Plant
Risk allocation among various project participants to finance and construct a power plant. Testing the project's cash flows under varying scenarios with a cash-flow simulation model. What are acceptable DSCR levels? What returns does equity look for?
End of Day 3

Day 4

Themes: Risk Management with Derivatives, Development Agencies, Funding Power Projects

 
Price Volatility and Risk Management with Derivatives in Projects

  • Financial price movements today: volatility and risk
  • Commodity-linked derivatives and securities
  • Using interest rate and currency swaps to manage risk in projects
  • Options: caps, floors and collars

Roles for Development Banks and Agencies
        - World Bank Group
        - Regional multilateral development banks (ADB, IADB, EBRD, EIB, 
        - Islamic Development Bank, etc)
        - Bilateral agencies (FMO, DEG, OPIC, Proparco, etc.)

Water Infrastructure

  • Special features of limited recourse projects in water and sanitation
  • Array of structures: Service Agreements Leasing, BOT, Privatization
  • Who are the players? Investors and lenders?
  • Desalination and electricity projects
  • Case examples and PPP transactions

Case Study: Water Treatment facility
Participants will break into groups to prepare a case study concerned with financing a wastewater treatment plant in Latin America

Social Infrastructure 

  • Financing Hospitals, Schools, Prisons, Others
  • Concessions and Contract Terms
  • Risk Evaluation and Allocation
  • Monitoring Requirements

Self-Test and End of Program

Introduction to Cashflow Modeling Session Day 5:
Ras Laffan LNG plant
End of Day 4

Day 5

Themes: Modelling Workshop 


Participants will spend a day building a model for an LNG facility. They will assess a wide range of scenarios in order to test a limited-recourse financing package for debt capacity and suitability for investment. With discussion of common approaches to modeling with Excel, “dos’ and ‘don’ts” as well as the practical use models for negotiations.

Modeling Workshop Overview: Objectives and Approaches

  • Constructing a Model / Common Myths
  • Variations by Project Type

Structuring the Model and Organizing the Data to Create a Cashflow Statement

  • Developing the Assumptions Page
  • Construction Costs and Timing
  • Operating Cost, Plant Capacity Usage, Fixed and Variable Costs
  • Reinvestment, Plant Expansion, Productivity Shifts

Developing the Profit and Loss and Balance Sheet

  • Factoring in Reserves
  • Considering Currencies
  • Tax Calculations

Financing Section

  • Equity First or Pro Rata
  • Manually Designed Equity Subscription
  • Draw-down of Debt Linked to Specific Contracts or Expenditures or in a Hierarchy

Ratios and Sensitivity Analysis: Objectives and Limitations

  • Measuring Debt Capacity and Investor Return
  • Using Modelling Output for Initial Project Vetting
  • Supporting on-going Negotiations

Summary and Wrap-up of Modeling Workshop

End of Program

Day 1

Themes: Structuring Projects and Creating a Security Package; Discovering the Most Efficient Sources of Finance;
Cashflow modelling.

Project Finance Today
  • Current challenges in Southern Africa for project finance
  • Who are the players?
  • Identifying and allocating risks
  • What can go wrong?

Examples: Financing a pipeline, tankers; other oil and gas projects.

  • PPP and project finance: financing infrastructure
  • BOO, BOT, BOOT, DBFO and other approaches
  • Private investment in public infrastructure

Examples: Power projects and toll roads.

Projects and Risk Identification

  • Risks in development
  • Construction and operating risks
  • Feedstock and supply
  • Market risks
  • Environmental risks
  • Financial risks
  • Political and regulatory risks

Examples: Gas field development and infrastructure, oil refineries, LNG, Electricity plants.

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 Modelling Approaches

  • Financial modelling and cash flow analysis
  • The 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

Case Study: Financing a Gas Processing Plant.

Participants break into small groups to prepare a case study. A computer simulation will be used to model cashflows. Groups will present their solutions.
End of Day 1

Day 2

Themes: Legal Issues; Bank Finance; Export Credit Agencies; PPP for Transportation and other Infrastructure Projects
Case discussion
  • Legal Issues in Project Finance
  • Legal environment and regulatory conditions
  • Commercial points and legal points in various projects
  • SPV Structures
  • 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

Sources of Finance: Bank Loans

  • Banks and club loans
  • Syndicated loan financing
  • What security do banks want?
  • Market flex clauses
  • “Mini-perms”
  • Inter-creditor issues

Export Finance Techniques (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

 

  • PPP: Roads, Railroads, Airports, Ports and Other Transportation Projects
  • Public Private Partnerships (PPP) Principles
  • Roles for the Public and Private Sector
  • Different Structures and Degrees of Private Participation
  • Outright and partial government ownership
    - Long-term concessions and DBFO
    - Privatization of seaports; airport financing

Exercise: Constructing a risk matrix

Case Study: Airport finance; Negotiating a term sheet. (Could be a roadway case or a railroad)

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, as well as rating agency considerations in evaluating the proposed financing structure.

End of Day 2

Day 3

Themes: Capital Market Issuance for Projects

Using Capital Markets

  • 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 Structures

  • Murabaha, Istisna and Ijara in Projects

Examples

Leasing

  • Leveraged Leases
  • Advantages

Liberalizing Power Markets

  • Market forces and the effect on electrical supply
  • Fragmentation of electricity generation
  • Gencos/Transcos/Discos
  • Merchant power plants (MPPs)
  • Rating agencies' analytical model

Renewable Energy Projects

  • Growth of the market and various types of renewable energy projects
  • Comparing renewable to traditional fossil fuel burning plants
  • Project economics
  • What is driving the investment?
  • Government incentives in various countries

Case Study: Financing a Gas-fired Power Plant
Risk allocation among various project participants to finance and construct a power plant. Testing the project's cash flows under varying scenarios with a cash-flow simulation model. What are acceptable DSCR levels? What returns does equity look for?
End of Day 3

Day 4

Themes: Risk Management with Derivatives, Development Agencies, Funding Power Projects

 
Price Volatility and Risk Management with Derivatives in Projects

  • Financial price movements today: volatility and risk
  • Commodity-linked derivatives and securities
  • Using interest rate and currency swaps to manage risk in projects
  • Options: caps, floors and collars

Roles for Development Banks and Agencies
        - World Bank Group
        - Regional multilateral development banks (ADB, IADB, EBRD, EIB, 
        - Islamic Development Bank, etc)
        - Bilateral agencies (FMO, DEG, OPIC, Proparco, etc.)

Water Infrastructure

  • Special features of limited recourse projects in water and sanitation
  • Array of structures: Service Agreements Leasing, BOT, Privatization
  • Who are the players? Investors and lenders?
  • Desalination and electricity projects
  • Case examples and PPP transactions

Case Study: Water Treatment facility
Participants will break into groups to prepare a case study concerned with financing a wastewater treatment plant in Latin America

Social Infrastructure 

  • Financing Hospitals, Schools, Prisons, Others
  • Concessions and Contract Terms
  • Risk Evaluation and Allocation
  • Monitoring Requirements

Self-Test and End of Program

Introduction to Cashflow Modeling Session Day 5:
Ras Laffan LNG plant
End of Day 4

Day 5

Themes: Modelling Workshop 


Participants will spend a day building a model for an LNG facility. They will assess a wide range of scenarios in order to test a limited-recourse financing package for debt capacity and suitability for investment. With discussion of common approaches to modeling with Excel, “dos’ and ‘don’ts” as well as the practical use models for negotiations.

Modeling Workshop Overview: Objectives and Approaches

  • Constructing a Model / Common Myths
  • Variations by Project Type

Structuring the Model and Organizing the Data to Create a Cashflow Statement

  • Developing the Assumptions Page
  • Construction Costs and Timing
  • Operating Cost, Plant Capacity Usage, Fixed and Variable Costs
  • Reinvestment, Plant Expansion, Productivity Shifts

Developing the Profit and Loss and Balance Sheet

  • Factoring in Reserves
  • Considering Currencies
  • Tax Calculations

Financing Section

  • Equity First or Pro Rata
  • Manually Designed Equity Subscription
  • Draw-down of Debt Linked to Specific Contracts or Expenditures or in a Hierarchy

Ratios and Sensitivity Analysis: Objectives and Limitations

  • Measuring Debt Capacity and Investor Return
  • Using Modelling Output for Initial Project Vetting
  • Supporting on-going Negotiations

Summary and Wrap-up of Modelling Workshop

End of Program

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