Euromoney Audit Training

Summary of course content

Euromoney Training presents, 'Advanced Project Finance Workshop', intended for those who have an interest in the risk management / structuring aspects of Project Finance projects. It will teach delegates to: 

• Analyse risk characteristics and implement risk-allocation structures
• Evaluate the key financial sensitivities of a project and identify the main quantitative and qualitative
  measures
• Develop due-diligence tricks and avoid traps
• Discuss important issues such as documentation and major financing agreements in project contracts
• Through hands-on case study teamwork, determine suitable structures and metrics
• Understand the valuable counter-cyclical aspect of project finance in the light of the current financial
  crisis

This is Module One of the 2nd Annual Asia Project Finance Academy

Asia Project Finance Academy

M2: Energy Project Finance

M3: Infrastructure Project Finance

M4: Mining Project Finance

M5: Project Finance for PPPs

M6: Building Project Finance Models

The hugely successful Academy is a comprehensive 10-day training course that examines advanced techniques relevant to the current stressed global financial markets and enhances your ‘sector’ skills in three key areas (Energy, Infrastructure and Mining).

Although we recommed attending the full 10-day for maximum benefit, the modules are separately bookable so you can pick and choose the days that are most relevant to you. The Academy has been designed with Asia-Pacific in mind but the concepts are applicable to any region and the case studies used are global.

Course Summary

The Academy begins with a 3-day Advanced Project Finance Workshop focusing on the core skills of risk analysis and structuring, with a special emphasis on political risk. Team case presentations neatly wrap together these skills along with the analysis and sensitivities of the team case-study Excel models.

The next three modules teach up-to-date sectors skills in Energy Project Finance (2 days), Infrastructure Project Finance (1 day), and Mining Project Finance (1 day). Industry fundamentals are covered together with the key metrics and due diligence alongside case studies and international best practices.

This is followed by a 2-day workshop on the application of Project Finance for Public-Private Programmes (PPPs) with a special session on which PPP programmes work and which do not.

The final module, Building Project Finance Models (1 day), looks at the key financial ratios, the credit analysis, and the forecast basis for any cashflow projection. This overview allows you to ‘Build-your-own-model-from-scratch’ with the final model used in a course bidding contest!

All modules are highly interactive with many cases and recent examples referenced throughout to fully explore the world of Project Finance. Attending the 10-day Academy means you will leave the course with a thorough understanding of Project Finance techniques and sector skills that can be applied immediately to your job.

Note: Delegates to bring laptops. The bidding competition is two-people-to-one-laptop using the course model PF Final.

Who should attend?

• Bankers / Investment Bankers
• Project Financiers
• Financial Advisors
• Financial Analysts
• Accountants / Taxation Advisers
• Insurance Advisers / Brokers
• Project Lawyers
• Sponsors / Project Joint Venturers
• Business Developers
• Government / PPP Agencies
• Export-Credit Agencies
• Multilateral Agencies
• Relationship Officers
• Brokers
• M&A / Buyout Specialists
• Company Treasurers / Directors
• Credit Committee Staff
• Rating Agencies
• Project Managers / Engineers / Consultants
• Investment / Portfolio Managers

Supported by

    

 

 

Day 1: Hot buttons in project finance

Best sectors and project types

• Difficult sectors to avoid
• Which trends are current?

Why choose project finance vs balance-sheet finance?

• Sponsor’s rationale
• Lender’s criteria
• Constructor’s objectives
• Government’s role(s)
• Institutions / investors

Stages in project finance

• Time, team, costs
• Credit approval / information memorandum
• Syndication

Case study / modelling assignments
– Tollway – banks / bond
– 144A power project
– Oil & gas – political risk
– Infrastructure project

Credit criteria

Case study: credit analysis
– Impact of leverage
– Calculations for global coverage ratios
– Calculate liquidated damages / overrun / retention requirements

Credit factors

• How to choose sensitivities
• Key ratio targets
• Contrast to sponsors’ IRR, NPV, valuation analyses

How to determine the correct structure for each risk?

• The 7 risk systems
• The 16 risks to identify
• The 81 structures to apply

Operating:
– Cost, technical, management
– Completion / construction
– Political
– Infrastructure
– Market / revenues
– Environmental
– Inputs / reserve
– Sponsor / participant
– Force majeure
– Foreign exchange
– Engineering / design
– Syndication
– Interest / funding
– Legal

Day 2: Funding and documentation

Funding sources

• Debt
  − Local currency
  − Cross-border
  − Mezzanine
• Credit wraps
  − Monolines?
• Equity
  − Preference capital
  − Convertibles
  − IPOs/floats for projects
• Capital markets
• Leasing/Leveraged leasing
• Export-credit agencies
• Multi-lateral agencies
• Commodity-based
  − Offtake contracts
• Derivatives

Ratings for project financings

• How to get one from Moodys / Standard & Poors / Fitch

Contractual architecture

• PPP architecture including Concession Agreements / BOO / BOOT
• Special purpose vehicles (the 6 types)
• Operations / Management (O&M) contracts
• Turnkey construction contract
  − Delayed completion and systems performance insurances
• Offtake / sales contracts
• Support agreements / direct agreements
• Indirect supports / comfort letters
• Government guarantees

Funding documentation

• Loan agreements
• Joint venture / shareholder agreement
• Security documentation
  − Assignment of contracts / insurances
• Offshore proceeds account
• Swaps
• Securitisation
• Information memorandum

Due diligence

• How to scope the review
• Independence of the reviewer
• Fit to credit approval / compliance
• The “Bankable” feasibility study

Role of the advisor(s)

• When to involve advisors
• How to keep the costs down

Day 3: Political risk and case presentations

Case study presentations Each team presents its allocated case with structures and solutions as well
as cashflow sensitivities.

Expert feedback on the team’s presentation of the deal architecture, risks, and financial sensitivities.

Political risk structuring

• Definitions
  – Terrorist questionnaire
  – The classic three: expropriation; war; inconvertibility
  – The full set of 21 political-risk categories
• Export-credit agencies / bilateral agencies
  – KfW-Ipex
  – ECGD, UK
  – EDC, Canada
  – JBIC/NEXI, Japan
  – US Eximbank
  – OPIC, USA
  – EFIC, Australia
  – SACE, Italy
  – Tactics for approaching the ECAs
• Multilateral agencies
  – World Bank
  – Multilateral Investment Guarantee Agency (MIGA)
  – International Finance Corp (IFC)
  – European Bank for Reconstruction & Development (EBRD)
  – Asian Development Bank (ADB)
  – How to approach the multilaterals?

Project finance as a competitive tool

• How to integrate project financing into the bid
• Contract / tender bidding
  – “Real” turnkey construction contracts

Practical case study: PPP bidding
– Croydon Tramlink, UK
– The ‘ABN Amro’ Sydney model

New horizons for projects and funding sources
– “Green” funds
– Emerging-market funds
– Tax structures
– Performance insurances
– Infrastructure / development funds
– Capital markets
   - Wraps
   - Partial risk
   - Credit guarantees
– Islamic project finance
– Credit Derivatives

Note the pre-course pack / CD includes the Project-Finance Risks chapter and the suite of cases and cashflow models.

• Richard Tinsley

  Richard Tinsley is a banker/engineer/economist with over 30 years experience, mostly as a strategic / financial advisor or as the lead banker on numerous transactions -- totalling US$14.8 billion at last count in 35 countries -- but also as CEO and CFO of a project development and operating company. (He issued one of the first true Project-Finance bonds.) He has worked in five countries: Ireland, Canada, USA, UK, and now Australia. Richard is President of International Advisory & Finance. IAF is a network of firms in the infrastructure, energy, and resources finance sectors in New York, Boston, California, Mumbai, Johannesburg, Melbourne, and London.
  
  In the finance field, Richard has been Project-Finance director at Continental Bank (Chicago); European Banking Company (London); Prudential-Bache Capital Funding (Wall St.), and Indosuez Australia (Sydney, Australia -- now Calyon).
  
  As a professional independent director, he serves as an adviser to infrastructure, energy, resources, telecoms, and water utilities companies worldwide. Richard Tinsley has many world-first Project-Finance applications and particularly relishes the cross-fertilisation of structures from one industry sector to another.
  
  Richard teaches the full range of Project-Finance courses around the world. He is the author of the self-study guide and CD-ROM on Project Finance as well as two books: Advanced Project Financing: Structuring Risk, 1st Edition, and Project Finance in Asia Pacific: Practical Case Studies for Euromoney Books.
  
  Richard is a Visiting Fellow at the Applied Finance Centre for Macquarie University throughout Asia and gives the Project Finance core and Infrastructure Finance elective for the University of Stellenbosch’s Master in Development Finance in Cape Town, South Africa.

  Courses run by this instructor

  • Infrastructure Project Finance
  • Mining Project Finance
  • Advanced Project Finance Workshop
  • Energy Project Finance
  • Building Project Finance Models
  • Project Finance for PPPs

Interested in holding this course in-house? Please fill out your details and a member of our team will be in touch with more information.

Project Finance Modelling

21-23 May 2012 (Hong Kong, Hong Kong)

'Project Finance Modelling' is designed to support middle and senior managers dealing with financial models from disparate sources, to enable them to be compared and analysed on a consistent and focussed basis.

Financing Energy Projects: Oil, Gas and Power

2-6 Jul 2012 (Singapore, Singapore)
10-14 Dec 2012 (Hong Kong, Hong Kong)

A practical guide shows you how to structure upstream and downstream oil and gas projects including field development, rigs, platforms, pipelines, and other transportation infrastructure

Renewable Energy Project Finance

18-20 Sep 2012 (Singapore, Singapore)

This course shows you the most effective approaches to financing renewable projects in many parts of the world, focusing on how these transactions differ from more conventional deals

Infrastructure Project Finance

15 Oct 2012 (Sydney, NSW, Australia)

Euromoney Training presents, 'Infrastructure Project Finance', intended for those who have an interest in the project finance aspects of the different infrastruture sectors and the risks involved. This is Module 3 of the 2nd Annual Asia Project Finance Academy. Modules are bookable separately or you can attend the whole Academy saving US$6,850

Mining Project Finance

16 Oct 2012 (Sydney, NSW, Australia)

Euromoney Training presents, 'Mining Project Finance', intended for those who have an interest in the area of project financing in the Mining industry and identifying the opportunities and potential pitfalls with this commodity-based project finance area. This is Module Four of the 2nd Annual Asia Project Finance Academy. Modules are bookable separately or you can attend the whole Academy saving US$6,850

Building Project Finance Models

19 Oct 2012 (Sydney, NSW, Australia)

Euromoney Training presents, 'Building Project Finance Models'. This is Module Six of the 2nd Annual Asia Project Finance Academy. Modules are bookable separately or you can attend the whole Academy saving US$6,850

3rd APAC Project Finance Academy

8-19 Oct 2012 (Sydney, NSW, Australia)

The Euromoney Training Asia-Pacific Project Finance Academy is a comprehensive 10-day academy that examines advanced techniques relevant to the current stressed global financial markets and enhances your ‘sector’ skills in three key areas.

Project Finance for PPPs

17-18 Oct 2012 (Sydney, NSW, Australia)

A 2-day workshop on the application of Project Finance to Public- Private Programmes (PPPs) with a special session on which PPP programmes work and which do not. This is Module Five of the 2nd Annual Asia Project Finance Academy. Modules are bookable separately or you can attend the whole Academy saving US$6,850

Advanced Project Finance Workshop

8-10 Oct 2012 (Sydney, Australia)

Intended for those who have an interest in the risk management and structuring aspects of Project Finance projects, it focuses on the core skills of risk analysis and structuring, with a special emphasis on political risk.

Energy Project Finance

11-12 Oct 2012 (Sydney, Australia)

This course examines advanced techniques relevant to the current stressed global financial markets and provides you with up-to-date sectors skills at financing energy projects.