Course overview:

The 17th Project Finance School covers all aspects of project finance law and contract documentation, including new and advanced techniques. Participants will gain a thorough knowledge of the key legal issues arising in topics such as risk analysis and allocation, new structures and sources of funding, basic project contracts and financing agreements.

This five-day school will be invaluable in increasing your knowledge and understanding of the key legal and contractual issues in international project finance and improve your ability to solve practical problems.

Who should attend?

• The course will provide invaluable information to:
• Project lenders, sponsors and contractors
• In-house lawyers in banks and financial institutions
• Bank officers responsible for evaluating or structuring projects
• In-house lawyers and financial officers of project sponsors and contractors
• External legal and financial advisers

A highly practical five-day training course with interactive workshops, where you will be:

• Analysing and allocating project risks
• Applying the concept of bankability to project contracts
• Identifying typical provisions in international construction contracts
• Examining operation and maintenance contracts
• Understanding the financing agreements
• Taking part in a two-day intensive workshop focusing on key project finance issues and successful negotiation techniques

Supported by:

 

 

 

 

 

 

 

Day 1

Analysing and allocating project risks

Faculty: Gide Loyrette Nouel Introduction

• What is project financing?
• Introduction to the analysis and allocation of project risks

Understanding the sponsor/borrower/ host government perspective

• The players: the project parties amongst whom risks may be allocated
• The risks to be allocated
• Techniques of risk mitigation/avoidance

Understanding the bankers’ motives

• Bank objectives and general approach
• The concept of bankability
• Allocation of risks: when is the bank inclined to take project risk?
• Techniques of risk mitigation/avoidance

Examples of different project structures

• Single client risk: projects sold to the public sector
• Full commercial risk: financially freestanding projects

Workshop 1: Analysis and allocation of risk through the preparation of a risk allocation matrix

Day 2

International construction operation and maintenance contracts

Faculty: Gide Loyrette Nouel

Introduction

• Definition and role of project documents
• Essential requirements and interests of lenders, sponsors and the contractors

Offtake agreements

• Securing the revenue stream of the project
• Payment structures
• Covering risks of revenue shortfalls and cost increases
• Termination issues

Turnkey construction contracts

• Achieving certainty of out-turn cost
• Lump sum fixed price: the risks transferred or insured
• Payment mechanisms
• Lenders checks/controls on cost overruns
• Project company’s obligation: back-to-back with other project agreements with the project contracts
• Completing on time
• Force majeure and grounds for extension of time
• Liquidated damages for delay in completion
• Termination for extended delay
• Quality/performance of the asset
• Rejection of inadequate performance
• Warranties and liability for defects
• Exclusions and limitations on liability

Operation and maintenance contracts

• The services provided by the operator
• Interface with the construction contract
• Incentivising the operator as to costs and performance
• The operator’s liability for inadequate performance of the asset

Workshop 2: Delegates will be divided into groups representing the different parties involved and will analyse and seek solutions to problems arising in the negotiation and performance of the above agreements.

Day 3

Financing the deal: understanding the financing agreements

Faculty: Berwin Leighton Paisner LLP

Introduction

• Overview
• What are the key documents?
• How do they interact with the project documents?

The loan agreement

• Key features
• Representations and warranties
• Covenants
• Events of default
• Conditions precedent
• Cover ratios
• Other terms
• Intercreditor issues

Credit enhancement devices

• Guarantees
• Letters of credit
• Insurance
• Hedging

Multi-source finance

• Export credit agencies
• Multilateral agencies
• Bilateral agencies
• Bond issues
• Mezzanine or subordinated debt
• Lease and vendor finance
• Use of common terms agreement
• Intercreditor issues

The security package

• Purpose of security
• Usual tools used
• Structuring the security package
• Taking security over foreign assets
• Other security issues

Direct agreements

• Purpose and use
• Key terms and their role

Day 4 & 5

Intensive two-day workshop

Faculty: Norton Rose

Workshop 3:

The two-day workshop will be based on a hypothetical project to construct, operate and maintain a chemical plant in the UK. The project is to be a joint venture between a major international materials company, an expanding conglomerate involved in the construction of industrial plants, which through its subsidiaries will undertake the construction, operation and maintenance of the plant, and a US investment company.

The plant is to be built on part of a site containing an existing chemical plant. The purpose of the project is to phase out the old plant and introduce a new, clean and superefficient oil to derivatives conversion plant. The plant will operate by processing a raw feed stock crude oil and will require a steady supply of crude oil as well as a reliable electricity and water supply. Financing for the project is to be made up partly by loan facilities from a syndicate of banks.

Key issues for negotiation

Key issues arising from the project which the groups will be required to form a position on and negotiate include:

• Environmental issues
• Security of supply
• Cost overruns/delays
• Insurance issues
• Take or pay
• Dividend policy

• This course instructor is a partner in the Paris office of Gide Loyrette Nouel. His practice concentrates on project finance, banking and privatisation in both the developing and developed world. He has advised international financial institutions, concession companies, operators, contractors and bidding consortia in infrastructure projects ranging from toll roads to IPPs, water treatment facilities and desalination facilities.
  
  Prior to joining Gide Loyrette Nouel, the course instructor was counsel to the EBRD in London and thus has in-depth knowledge of how to work with IFIs. He is a member of the Bar in New York and Paris.

  Courses run by this instructor

  • Financing Agreements in Project Finance
• Gide Loyrette Nouel is one of the leading international law firms in the world with 88 partners and over 400 associates. With more than 20 partners and 120 lawyers in its London and Paris offices, the Finance/Project Finance department is one of the largest and most highly regarded banking groups amongst the major international law firms. The firm strongly believes in building long term relationships with its clients by understanding their businesses and providing flexible, innovative and tailored solutions.
• Norton Rose is a major international law firm with a worldwide network of offices providing a seamless global service to clients. They act for global banks and other financial institutions, international businesses, major public  and private companies, government departments and sovereign states. Their business covers the whole spectrum of financial and business activities. Areas of particular expertise include aviation, construction, energy  and natural resources, rail and shipping.
• Jeffery Barratt is head of Norton Rose's global projects group and is senior banking partner. He has a broad range of experience of financing and capital market transactions acting on behalf of sponsors, lenders and mulitilateral institutions and has been involved in many complex infrastructure and other project financings in Europe, the Middle East and South East Asia.
• Berwin Leighton Paisner LLP is a premier, full-service law firm headquartered in the City of London. We offer pragmatic, commercial legal advice that helps major public and private companies, financial institutions, public sector bodies and private clients to achieve their goals. Our service extends to over 65 jurisdictions, with offices in Abu Dhabi, Brussels, Moscow (Goltsblat BLP), Paris and Singapore.
• Mark Richards, a partner in the Projects Team, has advised clients on a wider range of the innovative and complex infrastructure projects structured using Public-Private Finance techniques, including structures involving clinical and medical procurements, defence asets, roads and asset-financed based projects. He has advised on concession contracts, loan transactions, equity structures, joint ventures, leasing transactions, subcontracts and project finance transactions. He is also qualified at the New York State Bar.“Impressive knowledge of a number of sectors" (Chambers UK 2008

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.

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