A three-day infrastructure project finance training course for public private partnerships (PPPs), designed to help participants break the project analysis process into its component parts and evaluate the roles played and sources of support provided by many parties.
Featuring:
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What is Public Private Partnership (PPP)?
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The Role of the Government PFI/PPP Unit
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Managing and Allocating Risks in PPP
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Quantitative Risk Analysis and Cashflow Forecasts
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Legal and Contractual Issues in PPP Projects
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Financing Issues: Sources of Funds and Credit Enhancement for PPP
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Capital Markets
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The PPP Tender Process
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Sources of Credit Support and Risk Support in International PPP Projects
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Further Sector Considerations: Special Features of Water Infrastructure
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PPP and Social Infrastructure
INFRASTRUCTURE & PUBLIC PRIVATE PARTNERSHIPS (PPP) INTRODUCTION
Infrastructure development is essential to sustaining economic growth and improving competitive position in today's global markets. Often, however, traditional public sector funding sources are severely constrained when it comes to financing public infrastructure facilities. Innovative approaches to financing infrastructure services and programs for Public Private Partnerships (PPPs) have therefore been endorsed by many countries as means of accelerating delivery of such services. In Europe alone, the number of PPP project financings has exceeded $115 billion to date.
An essential element of PPP is the desire to link public sector accountability with private sector discipline, expertise, efficiency at delivering such services, and financial resources. This is equally true in both developed and developing countries.
Participants in this hands-on program will become thoroughly familiar with the array of PPP models from Supply and Service Contracts, Management Agreements, Leasing, DBO, BOT, BOO, Privatisation and a continuum of other approaches. They will see how the concept of balancing risk and 'value for money" is central to governmental policy and decision-making. They will also consider the outlooks of other stakeholders, besides creditors and guarantors of projects, when approaching PPP transactions.
PPP PROJECT FINANCE TRAINING COURSE OBJECTIVES
While differentiating between countries and sectors, this program is designed to help participants break the project analysis process into its component parts and evaluate the roles played and sources of support provided by many parties. Techniques for assembling information and making qualitative judgments are described. Tools used to conduct careful quantitative financial analysis will be thoroughly explained. PPP cases and examples from around the world that have successfully weathered the markets, as well as some that have deteriorated or failed, are used to ensure understanding and give participants practice in the application of concepts.
Additionally, careful attention is given to techniques for sourcing and enhancing the terms of funding both in local and international projects.
Elements unique to both bank and capital markets approaches to financing of PPP projects in transport, social services, and water sectors are highlighted.
Participants will be provided with a full course workbook as well as copies of all slide presentations, articles and case studies for reference following the session.
DAY 1
What is Public Private Partnership (PPP)?
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Public private partnerships (PPP) principles
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Roles for the public and private sector
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Different structures and degrees of private participation
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Contract services: operations and maintenance (O&M), O&M and management
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Leasing, lease develop operate (LDO), lease purchase, sale leaseback
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Design build (DB), DBM, DBO, DFBO, BOT, BOO, etc.
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Privatisation
The PPP tender process
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Specifying user needs in output terms
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Private sector informational requirements
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Identifying bidders and assessing risks negotiating strategies and closing
Sources of finance: managing and allocating risks in PPP; making a deal bankable
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Collecting information / macro and micro concerns of banks
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Risk allocation in PPP / developing a specialised matrix
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Risk mitigation techniques
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Risk assumptions (operating and maintenance, Construction, financial, revenues) environmental considerations
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Consultants in the PPP process
Quantitative risk analysis and cashflow forecasts
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Debt vs. equity and key measurements
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“Value for money” and the public sector comparator (psc)
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Unitary payments (ups)
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Probabilistic modelling
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Testing sensitivities
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Requirements of creditors vs. investors
- Other stakeholder considerations
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 2
Tollroad case discussion
Legal and contractual issues in PPP projects
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Regulatory framework and enforceability
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Policy objectives of the government concessions and licensing, process and oversight
Case study: reviewing a DBFO term sheet
Financing issues: sources of funds and credit enhancement for PPP
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Using bank debt
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Club deals, syndications and secondary market resale
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Term sheets, information memoranda and credit agreements
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Conflict resolution
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Case-example: Canada line rapid transit (Bruno Mejean, Nordlb)
Capital markets and PPP
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Special consideration in bond issuance
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Sales process, covenants, work out considerations
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Role of the rating agencies
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Mono-line insurers and wraps
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The role of private equity
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Infrastructure funds
The PPP tender process
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Special consideration in bond issuance
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Sales process, covenants, work out considerations
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Role of the rating agencies
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Mono-line insurers and wraps
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Tapping local markets
- Derivative products for PPP
Case study: financing an airport
Case focuses on conflicting goals of government and other stakeholders from the concessionaire to the contractor, operator and other stakeholders. Review of cash flow projections, project risks and their allocation through contracts in an airport transaction. The proposed financing mix, and rating agency considerations in evaluating financing structure are considered.
DAY 3
Case discussion
Sources of credit support and risk support in International PPP projects (Bruno Mejean, NordLB)
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Official risk enhancers and PPP (ecas, development banks)
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Rating agencies and pension fund sales for chilean and mexican PPP tollroads
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Accessing local capital markets in developing countries
Further sector considerations: special features of water infrastructure (Bruno Mejean, NordLB)
Case examples: wastewater treatment in Mexico with a peso-denominated private placement. Leasing in West Africa.
Case study: financing a water treatment plant
Participants will break into groups to prepare a case study concerned with the terms of a concession and financing a municipal wastewater treatment plant.
PPP and social infrastructure
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Financing hospitals, schools, prisons, others
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Sample concessions and contract terms
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Risk evaluation and allocation
- Monitoring requirements
Case study: financing a school
Self-test and wrap-up
Course summary and close
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Bruno Mejean
Bruno Mejean is Managing Director for International Project Finance and Business Development at SunEdison, a wholly-owned subsidiary of MEMC Electronic Materials. He is responsible for raising debt and equity for SunEdison projects outside North America. Previously, Mr. Mejean was Managing Director and Deputy General Manager at Nord/LB NY Branch, responsible for Corporate, Project, Export and Trade Finance Origination activities in the Americas. Nord/LB specialized in the financing of environmental and renewable projects having supported over 5000MW of renewable power projects since 2000 in North America alone. Nord/LB ranked among the top 5 project finance lenders to the sector in the Americas in recent years. Prior to 1999, Mr. Mejean was Director – Project Finance & Development at Raytheon Engineers & Constructors, responsible for arranging debt and equity financings for Hydrocarbon, Power, and Infrastructure projects. Prior to joining Raytheon, Mr. Mejean spent 20 years with various financial institutions, specializing in international finance. At SG, he was First VP and Manager of the US Export Finance Group. At Chase where he spent 10 years, Mr. Mejean was responsible for project financing in emerging markets with the support of US Eximbank and OPIC. Earlier in his career, Mr. Mejean was based in Tunis, responsible for Chase’s Trade finance activities in North Africa. Mr. Mejean received his MBA in finance from George Washington University and a Bachelor of Science from Georgetown University’s School of Business Administration.
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Meg Osius
Margaret Osius specializes in capital markets, and risk management, as well as international project finance. She works with corporations, financial institutions, public agencies, law firms, and private equity investors. Training and advisory work has covered approaches to financing infrastructure build-out and facilities acquisition, selecting among debt, equity, and hedging alternatives, and related topics. She has considerable professional experience with the oil and gas, power, transport, and telecom sectors.
Ms. Osius began her career at JP Morgan Chase Manhattan Bank, where, as a Vice President, she structured highly leveraged transactions and project financings and advised clients on foreign exchange and other price risk management strategies. Ms. Osius was responsible for a team of analysts 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.
Ms. Osius 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. She is a primary speaker in a series of video sessions created to cover the topic of Sound Banking Principles during executive training sessions in Moscow.
Until 2008 Ms. Osius was Chair of the Technical Advisory Panel (TAP) of the Public Private Infrastructure Advancement (PPIAF that provides technical assistance to emerging market governments. She is a member of the council on Foreign Relations and received an M.B.A. from INSEAD, the European Institute of Business Administration. Her B.A. degree is from Princeton University.
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