Course highlights:
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How projects are financed and the different options
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Why financial structuring is important
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How to evaluate and mitigate project risks
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What to look for in project cash-flows
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Sources of equity and debt funding
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The essential features in project documents
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Impact of current financial markets on project financing
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The fundamentals in the Bid Process
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Impact of the Equator Principles
- Why some projects succeed and others fail
Who Should Attend
This course is designed for staff responsible for major projects in:
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Construction companies
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Project contractors
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Facilities management companies
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Government and public service offices
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Public service utilities
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Commercial banks
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Project investment funds
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Project insurance companies
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Project law firms
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Engineering consultants
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Environmental consultants
- Development agencies
Course Aims
The course is designed to provide participants with the knowledge of the fundamental evaluation criteria and procedures which should be adopted to achieve a successful project financing. The Course program also provides participants with the necessary background to decide: (a) what funding structure is optimal, depending on location, timetable, sector and project content: (b) where the most appropriate funding sources can be found, and (c) the terms and conditions upon which financiers will provide such funds.
Course Background
Course MethodologyThe first half of the Course covers the fundamental issues, required project data, and evaluation mechanisms, which are subsequently reflected in, and described by, the project documentation. The second half of the course covers the application and illustration of these features. Case histories and exercises are used to demonstrate over a range of projects in different sectors and regions as to how projects have been successfully funded and, on occasion, how some projects have failed to reach their financiers' expectations!
DAY 1
Overview
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Characteristics of projects: public v. private
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Key players in a project financing
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Terminology and definitions (BOOT, PPP, IFI, IPP, PPA, etc.)
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Origins and recent history of project finance
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The project financing process
Funding structures
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Conventional loan security v. project finance structures: advantages/disadvantages
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On/off balance sheet: rationale, issues and criteria
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Proportions of debt and equity
Sources of debt and equity
Risk identification and analysis
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What is risk? Why are lenders risk averse?
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Impact of Basel II
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Identification of risk types: tech., completion; financial; etc.
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Environmental risks : EQUATOR Principles
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Evaluation of risk impact
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Creation of risk matrix
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Risk mitigation
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Role of capital markets
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Role of insurance: commercial, financial, political
- Debt/equity ratios: risk and project type
DAY 2
Project appraisal and process
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Cash-flow/spreadsheet make-up
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Issues to note in cash-flow models
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DCF & IRR
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Criteria and ratios used by lenders and investors
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Cross-sector review of ratios and IRRs
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The bid process
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Documents required: information memoranda, etc.
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Role of financial/technical/legal advisers
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Advantages/disadvantages of project finance
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Common problems arising in projects
Project documents: key clauses and features
Documents
Clauses
DAY 3
Power sector
Real-life case histories from developed and emerging markets worldwide will be taken and discussed for projects in all the sectors mentioned below. Particular attention will be made to funding structures, sources of funds, inherent project risks, and project outcomes and performance. Participants will be challenged to provide inputs to these discussions on both an individual and group basis in an inter-active manner.
Oil and gas sector
Real-life case histories from developed and emerging markets worldwide will be taken and discussed for projects in all the sectors mentioned below. Particular attention will be made to funding structures, sources of funds, inherent project risks, and project outcomes and performance. Participants will be challenged to provide inputs to these discussions on both an individual and group basis in an inter-active manner.
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Martin Blaiklock
Martin Blaiklock has over 25 years experience of structuring, developing, evaluating and implementing the funding of public and private sector projects (i.e. PFI’s, PPP’s, BOOT’s; PSP’s, IPP’s, etc.) in infrastructure, energy, and the process industries. Uniquely, he has worked for extended periods in: * An investment bank (Kleinwort Benson, now Allianz/Dresdner); * A commercial bank (HSBC); and * A development bank (EBRD, as Director of Power & Energy Utilities) For the last 15 years he has operated as an independent consultant, both in the UK and internationally.
As a banker, he has worked on nuclear power projects in the UK, Canada and Central Europe. He has been involved in many major UK PFI & PPP projects, and was Expert Witness for the Parliamentary Enquiry into the London Underground PPP. He has contributed to many UK Parliamentary and National Audit Office Enquiries. Martin is well versed in government and IFI procedures and project appraisals (e.g. Public Sector Comparators, etc.). Martin has undertaken project assignments throughout the World, particularly in emerging markets in Russia and Eastern/Central Europe, Latin America, Africa and the Middle East. He regularly speaks at seminars on project finance/PPP’s, e.g. for the World Bank, EBRD, banks, companies and academic institutions.
Courses run by this instructor
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