Project Finance - An Introduction

Course level

Introductory

Delegates

This course will be of benefit to those working within, or intending to move into, project development or project finance areas. Previous participants have included engineers, bankers, accountants, lawyers and middle/senior managers in utility companies, commercial banks, consultancy and law firms.

Overview

This three-day course aims to provide an overall view of the concepts and approach used in structuring and arranging project finance transactions, teach risk analysis and risk management techniques, develop a project appraisal methodology, demystify the language and approach of financiers and transfer an understanding of the drivers, approaches and concerns of the key players involved in creating and financing major projects. No prior knowledge of project finance is assumed.

Learning outcomes include obtaining a greater understanding of:

• Overview of Background Factors
  • What does ‘project finance’ mean?
  • What key features do we see?
  • Parties involved - interests and roles
  • Documentation - what are the aims?
  • Project development process
• What is Project Finance?
  • Importance of cash flow
  • Who are the major players?
  • What is covered by due diligence?
  • Understanding the risk allocation
  • Project economics and cash flow models
• Why Use Project Finance Structures?
  • Why is project finance used?
  • Limited recourse structures
  • Investors - gearing benefits
  • Commercial lenders' requirements
  • Public sector interest in project finance
• Lending Principles
  • How do lenders assess projects
  • Assessing credit worthiness
• Sources of Project Finance
  • Investment funding
  • Commercial debt facilities
  • Credit enhanced bond issues
  • Export credits
  • MLA facilities and co-financings
  • Leasing
• What Can We Learn From Successful Projects?
• Understanding Project Risks
  • Common causes of project difficulties
  • Practical risk analysis methodology
• Key Areas of Project Risk
  • Concession and implementation risk
  • Construction risks
  • Offtake and sales risks
  • Foreign exchange and interest rate risks
  • Covering country and political risks
  • Project risks in particular sectors
• Project Appraisals
  • Developing a methodology
• Cash Flow Analysis
  • What do we want from a model?
  • Repayment profiles and coverage ratios
  • Key management concerns with models
• Commercial Documentation
  • Overview of the commercial matrix
  • Concession documents
  • Convenants, EODs and termination
  • Shareholder agreements
  • Sales and off-take contracts
  • Supply contracts
  • Construction arrangements
  • O&M; agreements
  • Project insurances
• Loan Documents
  • Basic controls, disciplines and EODs
  • Intercreditor issues and concerns
  • Project forecasts and upside sharing
  • Syndication and the deadwood clause
• Security and Support Documentation
  • Defensive aims of security

Course Dates