DAY 1 THEMES: STRUCTURING PROJECTS AND CREATING A SECURITY PACKAGE; DISCOVERING THE MOST EFFICIENT SOURCES OF DEBT FINANCE; INTRODUCTION TO CASH FLOW MODELING INTERNATIONAL PROJECT FINANCE MARKETS TODAY Current Challenging Markets for Project Finance Transactions
BOO, BOT, BOOT, BLT and Other Approaches to Private Investment in Public Infrastructure
Who are the Players?
Identifying and Allocating Risks
What Can Go Wrong?
Examples: Financing Pipelines, Power Projects and Toll roads
SOURCES OF FINANCE: Financing Checklist CASHFLOW MODELLING WORKSHOP;ANALYTICAL TECHNIQUES AND CREDIT ASSESSMENT Financial Modeling 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: Working With Cash Flow Modeling Software to Finance a Fertilizer Plant Participants break into small groups to prepare a case study that analyzes a fertilizer project. A computer simulation will be used to analyze pro forma cash flows. Groups will present their solutions.
DAY 2
THEMES: INFRASTRUCTURE PROJECTS; POWER; EXPORT CREDIT AGENCIES CASE DISCUSSION LEGAL ISSUES IN PROJECT FINANCE 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
TRADITIONAL AND CONTEMPORARY SOURCES OF FINANCE: BANK LOANS Banks and the Current Club Loan Market
Syndicated Loan Financing
What Security do Banks Want?
Development Bank "A" and "B" Loans and Other Funding Sources
Current Inter-creditor Issues, New Conditions, Pricing
CAPITAL MARKETS AS SOURCES OF FUNDING U.S. 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
EXPORT FINANCE TECHNIQUES 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
Risk allocation among various project participants in an Asian Power project. 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? When is bond issuance a realistic option?
DAY 3
THEMES: OTHER SOURCES OF FINANCE AND POLITICAL RISK SUPPORT; TRANSPORT PROJECTS LIBERALIZING POWER MARKETS Market Forces and the Effect on Electrical Supply
Gencos/Transcos/Discos
Merchant Power Plants (MPPs)
Rating Agencies' Analytical Model
What Happened in California?
MORE ON POLITICAL RISK SUPPORT
FURTHER ROLES FOR MULTILATERAL DEVELOPMENT AGENCIES (MLA's); PRIVATE SECTOR RISK PROVIDERS World Bank Group
Regional Multilateral Development Banks
(ADB, IADB, EBRD, EIB, Islamic Development Bank, etc)
Bilateral Agencies (OPIC, Proparco, FMO, etc.)
Private Sector Providers
ISLAMIC STRUCTURES AND SOURCES OF FINANCE FOR PROJECTS Types, Sources, Structures
Inter-creditor Issues
Examples
FINANCING AIRPORTS, PORTS AND OTHER TRANSPORTATION PROJECTS Ownership Structure
Outright and Partial Government Ownership
Long-Term Concessions
Privatization of Seaports vs. Airport Financing
Exercise: Constructing a Risk Matrix for Airport Projects
CASE STUDY: Airport Finance; Negotiating a Term Sheet Participants will break into groups to work on this limited recourse 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.
DAY 4
THEMES: LEASING; WATER AND SANITATION PROJECTS; RISK MANAGEMENT WITH DERIVATIVES
LEASING APPLICATIONS
Leasing Applications in Projects
Evaluating Cost
Case Examples: Colombia and Brazil
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: FINANCING A WATER TREATMENT PLANT Participants will break into groups to prepare a case study concerned with financing a wastewater treatment plant in Latin America
PRICE VOLATILITY AND RISK MANAGEMENT USING DERIVATIVES IN PROJECT FINANCE Financial Price Movements Today: Volatility and Risk
Using Interest Rate and Currency Swaps to Manage Risk in Projects
Using Options: Caps, Floors and Collars
Commodity-Linked Derivatives and Securities
Oil, Gas and Electricity Hedging with Case Examples of Application
CASE: Interest Rate and Currency Risk Management for a Power
Project
Self-Test and End of Program
DAY 5
THEMES: PROJECT FINANCE MODELING WORKSHOP Participants will spend a day building a model for Ras Laffan, a Liquified Natural Gas (LNG) project in Qatar. 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 ‘dont’s’ 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 Modeling Output for Initial Project Vetting
Supporting on-going Negotiations
Summary and Wrap-up of Modeling Workshop