Project Finance Academy

8 days 3-12 Jul 2017, London UK £7,995.00 + VAT* Download brochure Add to basket

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Overview

This course is made up of four separately bookable modules:

This programme consists of four separately bookable modules, book the full Project finance academy and save £2535.

This 8 -day Project Finance Academy is designed to assist bankers, private investors, project developers, equipment suppliers, official creditors, and other project participants in acquiring all the skills they will need to evaluate project financing transactions in a wide variety of industrial sectors.  Relying heavily on examples from around the world characteristic of the energy, oil and gas, mining, transportation, social services, water and sanitation and telecommunications businesses, attendees will be brought up to date on the very latest techniques and innovative approaches to structuring and funding projects.
The program is divided into four modules that may be attended in full or booked separately:


Module 1 conducted from days 1 to 3 comprises the program’s core. A rapid paced discussion of key aspects of project structures, at its conclusion participants will be able to break analysis into its component parts. They will have gained techniques for assembling market information, making qualitative judgments, developing key agreement and conducting thorough quantitative financial analysis of projects. This module further identifies the many sources of finance and risk support, from bank markets, to bond issuance, leasing and other foreign and local currency funding alternatives, highlighting their differences, requirements and investor concerns.


Building on a foundation established in the first portion of the program Module 2 introduces elements unique to projects in the natural resource sectors: oil, gas and mining. Discussion and cases cover upstream oil and gas delivery as well as green-field and later phase mining projects. Approaches to equipment finance are highlighted, including Islamic alternatives. Effective applications of interest rate, currency and commodity derivatives are described.


Module 3 This day-long session gives participants a hands-on opportunity to build a cash flow model for an LNG facility using Excel-based software.  At the conclusion of the segment participants will be have built a pro forma project model suitable for examining debt capacity and project return on investment.


Module 4 In the final two days participants will become familiar with the wide array of models for Public Private Partnerships (PPP) designed to link public sector financial resources and accountability with private sector discipline, expertise, and capital. They will look at approaches to ‘balancing risk’ among various stakeholders, creditors and guarantors of projects as well as policy objectives like ‘value for money” central to Sovereign and Sub-sovereign governmental decision-making. Case examples cover projects in transport, water, sanitation, besides services and other infrastructure.
This final module also pays careful attention to the many techniques for enhancing the terms of funding provided by official players like the World Bank, ADB, EIB, IADB, EBRD, the Islamic Development Bank, Export Credit Agencies, use to promote infrastructure development.

 

Who should attend

  • 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

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

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

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

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

Venue

London

Central London Hotel Venue

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

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

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.

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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

Day 1

Themes: Structuring Projects and Creating a Security Package; In-depth Study of a Gas Processing Plant  


Project Finance Overview

  • Current Challenges /Approaches
  • Who are the Players? Identifying and Allocating Risks
  • What Can Go Wrong?
  • Examples from the Energy Sector
  • Financing Infrastructure

Various Projects and Approaches to Risk Identification

  • Across Sectors
  • Risks in Development,
  • Construction, and Operating Risks
  • Feedstock and Supply
  • Market Risks
  • Environmental Risks
  • Financial Risks
  • Political and Regulatory Risks

Sources of Finance: Financing Checklist

  • Domestic and Foreign Banks
  • Bond Markets
  • Development Banks, ECAs and Other Official Creditors
  • Leasing
  • Islamic Finance
  • Sources of Equity

Cashflow Forecasting

  • Financial Modelling and Cash Flow Analysis
  • View of Lenders: DSCR and PV Coverage
  • Equity Considerations: IRR and NPV
  • Approaches to Evaluating the Cost of Capital
  • Project Returns vs. Equity Returns
  • Forecasting Techniques and Limitations
  • Probabilistic vs. Non-Probabilistic Model-Building

Case Study: Working With Cash Flow Modelling Software to Finance a Fertilizer Plant
Participants break into small groups to prepare a case study that analyses a fertilizer 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 Transportation Infrastructure


Case Discussion

Legal Issues and Documentation

  • Legal Environment and Regulatory Conditions
  • Commercial Points and Legal Points in Various Project Structures:
     - Incorporated and Unincorporated Joint Ventures
     - Partnerships and Limited Partnerships 
  • Key Contractual Agreements and Structuring Considerations
  • Developing a Term Sheet
     - Limiting Recourse
     - Tax Gross Up Issues
     - Market Disruption Provisions
     - Reps and Warranties
     - Conditions Precedent
     - Covenants Including MAC Clauses
     - Hedging Requirements

Sources of Finance

  • Banks and the Current Club Loan Market
  • Syndicated Loan Financing
  • What Security do Banks Want?
  • Market Flex Clauses
  • Development Bank "A" and "B" Loans and Other Funding Sources
  • Inter-creditor Issues

Credit Enhancement Alternatives

  • Guarantees and Insurance vs. Funding
  • Buyer and Supplier Credits
  • Bank Incentives Inherent in ECA Programs
  • Costs and Availability
  • Securitization of ECA Guarantees
  • Choosing a Special Purpose Vehicle

Sector Considerations

  • Ownership Structure
  • Outright and Partial Government Ownership
  • Long-Term Concessions and PPP structures like DBFO
  • Privatization of Seaports; Airport Financing

Exercise: Constructing a Risk Matrix for a Transport Project
Case Study: Airport Finance; Negotiating a Term Sheet
Participants will break into groups to work on this PPP project structure. Discussion will focus on project risks, their allocation through contracts, the mix of financing, cash flow projections. Also, rating agency considerations in evaluating the proposed financing structure.

Day 3

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

 
Case Discussion 

Using Capital Markets for Projects

  • Private Placements and Eurobond Issuance for Projects
  • Comparing Bond Issuance to Bank Loans
  • Nature of Investors, Timing and Flexibility
     - Project Size and Relative Cost
     - Security Requirements
     - Negative Arbitrage Issues
     - The Due Diligence Process / Road Shows
     - Rating Agency Considerations

Leasing Applications

  • Leasing Applications in Projects
  • Evaluating Cost

Case Examples: Colombia and Brazil

Conventional and Renewable Power Projects

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

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

Day 4  

Themes:  Natural Resources Projects
Upstream, Midstream and Downstream Oil and Gas
  • Structure: Upstream, Midstream and Downstream
  • Hydrocarbon Basics: Geology, Reserves
  • Supply and Consumption
  • Oil Production: Process Depletion and Enhanced Recovery
  • Financing Structures: Balance Sheet vs. Limited Recourse
     - Field Development and Platform Types
     - Production Facilities
     - Building and Financing Pipelines
     - Refineries and Petrochemical Plants
     - LNG Facilities

Allocating Risk

  • Technology and Construction/Completion
  • Reservoir/Reserve Risks
  • Feedstock Risk
  • Sales and Off-take
  • Operation and Maintenance
  • Abandonment/Decommissioning
  • Environmental/Regulatory Issues
  • Country/Political Risk

Logistics and Transportation Financing

  • Logistics: Pipelines, Shipping, and Storage
  • Types of Tankers
     - AFRA Classes (Average Freight Weight Assessment)
  • ULCC to Tanker Lightering

Islamic Finance

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

Case Study: Financing an Oil Rig
Participants will break into small groups to prepare a case study concerned with equipment financing. A computer simulation will be used to model possible outcomes. Groups will present their solutions.

Day 5 

Themes: Reserve and Off-take Evaluation; Mining Projects; Risk-Management with Derivatives
Stages in Financing Natural Resources Projects
  • Exploration/ Geology/Drilling/Reserve Estimation
  • Reserve-based lending and Borrowing bases
  • Mezzanine Funding
  • Oil and Gas Reserve Categories (P1, P2, P3)
  • Common Measures: (Loan Life Cover Ratio (LLCR), Project Life Cover Ratio (PLCR), Reserve Tail

Case Study: Financing a Condensate Field Development Project
Evaluating the security package and forecast cash flows for a condensate field. Structuring Approaches.  Finding funding.

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

Mining Transaction Considerations

  • Special Issues
  • Single Asset Projects and Asset Depletion
  • Off-take Arrangements
  • Construction Issues and Engineering
  • Mine Operating Risk
  • Environmental and Country Risk

Mining Case Study
Structuring a sales contract to support project financing of industrial minerals project. 


Self-test

Day 6 

Themes: Project Finance Modelling


Participants will spend a day building a model for a Liquified Natural Gas (LNG) project. They will test a limited-recourse financing package for debt capacity and attractiveness to investors. Discussion of common approaches to modeling with Excel, ‘dos’ and ‘don’ts’. Practical use of models for negotiations.

Modelling Workshop Overview: Objectives and Approaches

  • Constructing a Model / Common Myths
  • Variations by Project Type
  • Overview of LNG Plant and Major Contracts

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

Financing Section

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

Developing the Profit and Loss and Balance Sheet

  • Factoring in Reserves
  • Considering Currencies
  • Tax Calculations
  • Working Capital

Ratios and Sensitivity Analysis: Objectives and Limitations

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

Day 7 

Themes: Infrastructure Projects, PPP, and Transportation

What is a Public Private Partnership (PPP)?

  • Public Private Partnerships (PPP) Principles
  • Roles for the Public and Private Sector
  • Different Structures and Degrees of Private Participation
     - Contract Services: Operations and Maintenance (O&M), O&M and Management
     - Leasing, Lease Develop Operate (LDO), Lease Purchase, Sale Leaseback 
     - Design Build: DB, DBM, DBO, DBFO, BOT, BOO Concessions
     - Privatization

PPP Tender Process

  • Specifying User Needs in Output Terms
  • Private Sector Informational Requirements
  • Identifying Bidders and Assessing Risks Negotiating Strategies and Closing

Sources of Finance: Managing and Allocating Risks in PPP; Making a Deal Bankable

  • Collecting Information/ Macro and Micro Concerns of Banks
  • Risk Allocation in PPP/ Developing a Specialized Matrix
  • Risk Mitigation Techniques
  • Analysing Risk Assumptions (Operating and Maintenance, Construction, Financial, Revenues)
  • Environmental Considerations
  • Consultants in the PPP Process

Quantitative Risk Analysis and Cashflow Forecasts

  • Requirements of Creditors vs Investors
  •  Other Stakeholder Considerations
  • “Value for Money” and the Public Sector Comparator (PSC); Unitary Payments (UPs)

Case Study: Financing a Tollroad
Participants will break into groups to evaluate the financing scheme for a  toll road. They will assess the allocation of risks, and concession terms, and other contractual agreements.  A cash flow model will be used to test qualitative assumptions.

Day 8  

Themes: Financing Water, Sanitation and Other Social Services Projects


Case Discussion 

Legal and Contractual Issues in PPP Projects

  • Regulatory Framework and Enforceability
  • Policy Objectives of the Government Concessions and Licensing,
  • Process and Oversight

Case Study:  Reviewing a DBFO Term Sheet

Sources of Credit and Risk Support in International PPP Projects

  • Official Risk Enhancers and Development Banks
  • Rating Agencies and Pension Fund Sales
  • Accessing Local Capital Markets in Developing Countries

Water  and Sanitation Infrastructure

  • Special Features of Water and Sanitation Projects
  • Array of Funding Structures for Service Agreements and  Concessions
  • Who are the Players? Investors? Lenders?

Two Case Studies:

  • Financing a Water Treatment Plant 
  • Non-revenue Water (NRW)

Participants will review the terms of a concession for a municipal wastewater treatment plant. They will also review a service contract for reducing non-revenue water. In each case they will consider the merits of the proposed financing.

PPP and Social Infrastructure 

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

Case Example:  Financing a Hospital
Self-test and Wrap-up

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.
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