Euromoney Audit Training

Course Summary

This 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.

Modules

M1: Advanced Project Finance

M2: Energy Project Finance

M3: Infrastructure Project Finance

M4: Mining Project Finance

M5: Project Finance for PPPs

M6: Building Project Finance Models

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

All Modules can be booked separately. Group discounts are available.

To register on the full 10-day Project Finance Academy, please select 'Register' and follow the registration process. If you would like to register on an individual Module, please select your desired module below and follow the registration process on this product page.

Please note we cannot process multiple module registrations online. If you wish to attend more than one Module but not the whole 10-day Academy, then please download a PDF and either fax this back to us on +852 2866 7340 or email a scanned copy to training@euromoneyasia.com. You can also email us your registration details and one of our account managers will register your place for you.

Supporting publication

   

 

  

Advanced Project Finance

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 and modelling assignments

• Tollway – banks / bond
• 144A power project
• Oil & gas – political risk
• Infrastructure project

 

Credit criteria

 

Credit Analysis case study

• 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
• 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.

Energy Project Finance

Day 4

Energy industry cashflows

• The ‘target’ ratios
• Use of PV ratios

Liquidated damages (LDs)

• Calculations for each type
• Structuring

Energy industry ratings

• Special considerations
• Scoring

Case studies

• Keadby Power
  Review the actual LDs profile
• Petropower
  How to structure 100% LDs
• Hero Asia
  144A ratings and syndication

Power generation

• Risk and structuring

Power Purchase Agreement (PPA) dynamics

• Capacity charge
• Energy charge
• Maintenance reserve

Merchant power

• The 11 structures
• The 4 studies required

Power case studies

• Lomond Power
  Tariff structuring
• Milford
  Deemed despatch / merchant

LNG

• Risks and structuring
  – Liquefaction
  – Shipping
  – Terminal
  – Regasification

LNG case studies

• Train F
  Trustee borrowing structure
• LNG Qatar
  Finessing 2 trains
• Sabine Pass
  Use of the 144A markets

Renewable energy

• Hydro
  – Dam
  – Run-of-the-river
• Wind
  – Offshore
• Solar
• Biomass
• Wave
• Waste-to-energy

Case studies

• NT2
  Mega hydel
• Manitos
  Run-of-the-river
• Sinan Solar
  World’s largest PV PF
• Beta Wind
  Portfolio-style
• Keppel Tuas
  Deal-of-the year

Oil and gas

• Risks and structuring
• Upstream
  – Economic rent
• Mid-stream
• Pipelines
• LNG ships

Case study

• MoSAGas
  Dual-country cross-border special issues

Mining – fuel supply cashflows

• Risks and structuring
• Coal
• Uranium
• Geothermal

Case studies

• Ranger
  World-first rehabilitation guarantee
• Colowyo
  Mine-mouth coal

Day 5

Political-risk structuring

• The 11 key structures
• Main multilateral players
• ECAs
• Private PRI

Case studies

• Tata Mundra
  Full MLA / ECA / local bank structuring
• PNG LNG
  Largest structuring done to date
• Mariveles
  Sinosure’s first solo PF deal

Petroleum ‘special’ funding styles

• Production payment
• Commodity funding
• FPSOs
• Throughput agreements
• Borrowing base
• Oil rigs
• Cross-border
• Swaps / derivatives
• Royalty trusts

Case studies

• Cairn Energy
  Clever borrowing base metrics
• Jubilee
  Mega development / FPSO funding
• Coogee FPSO
  Small FPSO architecture
• Bass Strait
  Royalty trust

Energy industry – PF due diligence

• Role of the lender’s ‘independent’ engineer

Case studies

• Iagifu
  Importance of faults in reservoir assessment
• Paiton
  Infrastructure scope of work

Downstream cashflows

• CTL/GTL
• Refineries

Case study

• Guru Gobind Singh
  Classic refinery style

New horizons

• Specialist funds
• Islamic project finance

Case studies

• Jinchuan II
  Mezzanine fit
• Jimah Energy
  Islamic deal-of-the-year
• Alba
  Commodity funding
• Equate
  Islamic leasing (Ijara)
  

Infrastructure Project Finance

Day 6

Risk allocation for each sector

• Highways / tollways / bridges / tunnels
• Airports
• Ports
• Railways / undergrounds
• Hospitals / prisons
• Water / sewage
• Traffic studies
• Methods
• Ramp-up
• Due diligence
• Urban mass transit

Case studies

• N3 Tollway, S. Africa
  The government traffic studies were flawed. Learn what the banks did to correct this problem.
• Superhighway BOO/BOT, China
  How much of a real estate component should be counted in a tollway financing? Are the interchanges and corridor developments bankable?
• Laem Chabang Port, Thailand
  How can banks achieve a full market-risk on such a project financing? How can FX risks be packaged? Are there technology aspects in the project forecasts?
• Chengdu No.6 Water, China
  Examine China’s first water supply BOOT with the imaginative structuring of EIB alongside ADB. The first time municipality risk was assumed (no central government counter-guarantee).
• Westralian Airport
  How was the financing blended with a monoline tranche?

Contractor usage of project finance

• Tender conditions
• Delay / completion architecture
  

Mining Project Finance

Day 7

Which commodities to project finance?

• Minerals to avoid

Stages in financing the minerals industry

• Exploration
• Development
• Operations

Credit analysis criteria

• Economic rent
• Reserves
• Capital markets / bonds

Case studies

• Industrial Minerals, Australia
  How to structure sales contracts to support a project financing?
• Forstescue Metals Group, Australia
  US$2 billion in project financing without a banker in sight. Startup in 2008.

How mine project finance can go wrong?

Case studies

• Anaconda Nickel, Australia
  How the capital markets can be used for development capital? How can a packaged project attract US$340 million in fixed-rate debt? What was the cause for the 75% write-off?
• International Coal Financings, USA
  How the project finance banks lost US$1 billion on market risk?

Mining project finance due diligence

• Why are mining due diligence approaches not as good as the power sector?
• Ore reserve codes dissected

Commodity-based project financings

• Gold instruments
• Commodity swaps

Case studies

• Yanacocha, Peru
  Classic gold-mine receivables financing based on a 5-year reserve
• Iduapriem Gold Mine, Ghana
  Find out how the gold fee works? Can subordinated debt work within a gold loan?

Political risk structures in mining

Case studies

• Ambatovy, Madagascar
  definitely a Deal-of-the-Year; a blockbuster assembly of political-risk structuring.
• Batu Hijau, Indonesia
  A two-step financing weaving in KfW-Ipex, US Exim, and JBIC plus the sponsors’ subordinated debt.
• Newmont, Zarafshan, Uzbekistan
  How to fit OPIC, MIGA, and EBRD together with a project financing.
• Papua New Guinea
  Examine the political-risk structures for all the mining projects, including Lihir
• Escondida, Chile
  How to project finance without the banks?
• Phu Kham, Laos
  Combination of mezzanine debt and project finance within a commercial political risk package (not ECAs). Also wraps in some equipment-lease financing.

Project Finance for PPPs

Day 8

Fit of project finance to the PPP spectrum of 8

• Privatisation
• BOO (and variants)
• BOT (and variants)
• Leasing / affermage
• Management contracts
• Service contracts
• Supply contracts
• Cooperatives

PPP sectors and project types

• Power and power infrastructure
• Communications / telecoms
• Transport infrastructure
• Social infrastructure
• Public / military infrastructure

PPP processes and stages / timing

• Policy formulation
• International comparisons
• Processes
• Competition policy
• Role of the regulator
• Unsolicited projects

The 18 pillars of successful PPP programmes

• Role of the government PPP unit
  – Does the one-stop-shop really work? What policies and procedures need to be in place to make the PPP Unit work? What is the interface of the PPP Unit with Local Authorities?
• PICKO-PIMAC/KDI, South Korea
  – Korea has set in place probably the most aggressive government cospend among all the PPP programs. See which sectors and what programs are in mind.
• Philippines BOT Law
  – See why this simple Act spawned sufficient private-sector investment to take the country from a chronic power-supply deficit to a power supply surplus in less than 10 years.The BOT conditions allow the government to repurchase the assets if not needed of if other plans/ expansions emerge.
• Partnerships Victoria
  – Although originally closely aligned to the UK PFI model, Partnerships Victoria is the Australian leader, by far. What new policies and strategies/pragmatism have been developed especially in the social services arena?

Day 9

PPP tender / bidding

• The ‘track’ on PPP projects to date
• Outline business case
  – Risk control
  – Value management
• Output specifications
• Standard concession terms and conditions
• Consortium bidding dynamics
• Invitation to qualify
  – The ABN Amro model
• Invitation to tender
  – One / two envelopes?
• Bid Evaluation Procedures
  – Risk tradeoffs / matrix
• Preferred bidder(s)
  – Reserve bidder(s)
  – Project finance offer
• Concession finalisation
  – Project finance close

Risk matrices

• Logic diagrams
• Four-by matrices
• Who takes what risk?
• Materials - adverse – effects

World’s best practices

Case studies

• Indian Highways
  Learn why this is the simplest output specification yet anywhere in the world! How does the annuity payment work? Tolled vs. untolled? (Why is the UK PFI not the best practice?)
• Highway 407, Canada
  How did value engineering contribute so much to this 2-step programme? What tactics were adopted by the Canadian Provincial authority to maximise their return / value?
• Penang Bridge (OMT), Malaysia
  In this, the fifth-longest bridge in the world, the government specifically retains the right to renationalise the bridge as part of its planning for a second crossing later in the concession life. The concession price included the existing debt level which acts as a compensation cap for this renationalisation. The toll also has a split above a threshold level with the concessionaire. This bridge was funded by Islamic bonds.
• Mangaung Prison, South Africa
  The project received its approval based on the comparisons with other (over-crowded) prisons. The prison is so successful, that prisoners re-offend so that they don’t get transferred there!
• Mildura Base Hospital, Australia
  Some 230 quality criteria were imposed on this elaborate PPP concession, which included the provision of clinical services. Why was the preferred consortium ‘fired’ during the last-minute negotiations.
• S.E. Queensland Schools
  The supported debt model hasn’t been used that much worldwide. Why did Queensland try it on this PPP project package? What was the resultant funding structure from the sponsors?

New horizons for ppp projects and funding sources

• Specialist PPP funds
• “Green” funds
• Development funders
• Emerging-market funds
• Tax structures
• Infrastructure funds
• Capital markets
• Credit derivatives
• Building Project Finance Models

Building Project Finance Models

Day 10

Project finance modelling objectives

• Link to project finance’s 16 risks
• Model usage at different stages of project finance process
• Liquidated damages

The design and structure of financial models

• Objectives
• Flowchart
• Modules
• Menu and structure
• Help
• Testing

Sensitivity analyses modelling

• What if?
• Other Excel tricks?
• Scenario analysis
• Breakeven

Non-modelling inputs

• The key input assumptions can overwhelm the accuracy of any model. Six different information sources and approaches are outlined along with actual examples. How does each delegate keep up to date on the choices of input assumptions?

Term sheet bidding contest using course project finance model

• The way to translate the modelling (bidding competition) results into the termsheet is the final aspect of the course, especially with regards to higher leverage. The winning team will defend its bid and show how the model achieved the winning result.

• 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.

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

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.