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 (Oil, Gas, LNG, Power, Mining and Infrastructure).
Although we recommend 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.
View our 60 Second Interview with the Course Director - Richard Tinsley
We took the opportunity to ask our expert Course Director a few questions on the current market challenges and how he became involved in this exciting industry. This is what he had to say. This is what he had to say.
Modules Include:
M1: Advanced Project Finance (21-23 October 2013)
M2: Oil, Gas and LNG Project Finance (24 October 2013)
M3: Power Project Finance (25 October 2013)
M4: Mining Project Finance (28 October 2013)
M5: Infrastructure Project Finance (29 October 2013)
M6: Public-Private Project Finance (30 October 2013)
M7: Project Finance Risk & Recovery (31 October 2013 - 1 November 2013)
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.
The next four modules teach up-to-date sectors skills in some of today’s hottest industries:
Oil, Gas and LNG Project Finance (1 day), Power Project Finance (1 day), Mining Project Finance (1 day) and Infrastructure 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 1-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, Project Finance Risk & Recovery (2 days), examines projects that have gone wrong, including a review of credit factors and incorrect project assumptions.
All modules are highly interactive with many case studies and recent examples used throughout. Attending the full 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 above 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 publications:
Advanced Project Finance
DAY ONE
Hot buttons in project finance
Best sectors and project types
- Sectors to avoid
- Which trends are current?
Project finance vs. Balancesheet 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 complex - bond
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 analysis
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 TWO
Funding and documentation Funding sources
- Debt
- Local currency
- Cross-border
- Mezzanine
- Credit wraps
- Equity
- Preference capital
- Convertibles
- IPOs/floats for projects
- Capital markets
- Leasing/leveraged leasing
- Export-credit agencies
- Multilateral agencies
- Commodity-based
- Derivatives
Ratings for project financings
- How to get one from Moodys, Standard & Poors and Fitch
Contractual architecture
- Concession Agreements/BOO/BOOT
- Special purpose vehicles (the 6 types)
- Operations and 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 THREE
Political risk and case presentations
Political risk structuring
- Definitions
- Terrorist questionnaire
- The classic three - expropriation; war; inconvertibility
- 21 political-risk categories
- Export-credit agencies/bilateral agencies and tactics for approaching them
- KfW-Ipex/Hermes, Germany
- ECGD, UK
- EDC, Canada
- JBIC/NEXI, Japan
- US Eximbank/OPIC, USA
- SACE, Italy
- Sinosure, China
- EFIC, Australia
- Multilateral agencies and how to approach them
- World Bank
- Multilateral Investment Guarantee Agency (MIGA)
- International Finance Corp (IFC)
- Asian Development Bank (ADB)
- European Bank for Reconstruction & Development (EBRD)
Case study:
Each team presents its allocated case with structures and solutions as well as cashflow sensitivities.
Feedback is given on the team’s presentation of the deal architecture, risks, and financial sensitivities.
- Project finance as a competitive tool
- Integrating 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 team cases and cashflow models.
Oil, Gas and LNG Project Finance
DAY FOUR
Petroleum project financing
- Field development (upstream)
- Platforms/production facilities
- Pipelines/oil terminals
- Refineries/petrochemicals
- Coal-to-liquids/gas-to-liquids
- Coal-seam gas/coal-bed methane/fraccing
- LNG/regasification/shipping
Cashflow for oil, gas, LNG and refining
- Converting reservoir engineering and other 15 risks into cash flows
- Reserve tail/PV loan life ratios
Case study: LNG Train F
A trustee-borrowing structure SPV works for this style of deal. Why?
Reservoir engineering
- Seismic studies
- 'Proven' vs. 'Probable' reserves
- Production aspects
Special petroleum-industry project-finance structures
- Production payments
- Throughput agreements
- Hedging/options
- Royalty trusts
- Securitisation
- Tankers
Case studies:
Centragas
How to fund high-leverage pipeline infrastructure in capital markets and cover political risk.
Ekofisk Pipeline
How far can a borrower push a throughput agreement?
Sasol Gas Pipeline
Field facilities enhance the project’s cashflows.
First International Petroleum Transport
Shell spins off six tankers onto the capital markets, firstly as a private placement; then as a public issue.
Floating-Production-Storage-Offloading (“FPSOs”) Vessels
Novel financing techniques.
Ras Laffan LNG
The world’s largest PF bond issue at the time.
PNG LNG
Talk about 'mega'. This deal blows them all away! Examine the sponsor’s loan tranche.
Jurong Aromatics
This deal would not have succeeded without BP's sub-debt tranche.
Power Project Finance
DAY FIVE
Power industry risk analysis
- Technology and costs: Cogen, Cocycle
- Heat Rates
- Capex/MW
- Degradation
- Maintenance reserves
- Availability
- Fuel costs
- Emissions
- Renewables
- LNG
- Stages in power financing
- Concession/power purchaser
- Tenders/unsolicited
- Financing
Case studies:
Tejo Energia (“Pego”), Portugal
How can banks take 30-year risk on a 12-year deal? What is a cash sweep?
Mariveles
Sinosure did a project finance deal on its own. Why this coal?
Credit analysis
- Coverage calculations
- Reserve accounts
- Liquidated damages
Case study: Petropower
How could such a 'beside-the-fence' project attract 100% LDs?
Renewable energy projects
-
Wind
-
Hydro/mini-hydro
-
Biomass
-
Wave
-
Solar/photovoltaics
Merchant power plants
-
Price fuel = f(Price electricity)
-
Price gas = f(Market)/reset
-
Fuel subordination
-
Anchor tenant/host
-
Energy conversion agreement
-
Lender friendly
-
Cost curve
-
Other services
-
Portfolio
-
Traders
Case studies:
Milford
How was 'deemed dispatch' handled? What is the subordination structure?
Wind Energy
Overcome the difficulties in fitting wind into the grid and the complexities of the renewables payment regimes.
Mine-Mouth Power
How can the fuel supply be co-financed with the power plant?
Mining Project Finance
DAY SIX
Which commodities to project finance?
Stages in financing
- Exploration
- Development
- Operations
Credit analysis criteria
- Economic rent
- Reserves
- Capital Markets
Case studies:
Ranger Uranium
How can banks provide a rehabilitation guarantee to shut the mine down?
Industrial Minerals
How to structure sales contracts to support a project financing.
Colowyo
How do the capital markets judge a monetisation of coal-supply contracts?
Reserves due diligence
- Why are mining due diligence approaches not as good as the power sector?
- Ore reserve codes dissected
- Estimation short-cuts
Gold instruments
- Commodity swaps
- Commodity-linked bonds
Case studies:
Yanacocha, Peru
Classic gold-mine receivables financing based on a 5-year reserve.
Iduapriem Gold Mine, Ghana
How the gold fee works? Can subordinated debt work in a gold loan?
How mine project finance can go wrong
Cases studies:
Anaconda Nickel
How to use capital markets for development capital?
International Coal Financings
How banks lost US$1 billion on market risk?
Political risk structures in mining
Case studies:
Ambatovy
Deal-of-the-Year; a blockbuster assembly.
Batu Hijau
KfW-Ipex, US Exim, and JBIC, plus the sponsors’ subordinated debt.
Newmont, Zarafshan
How to fit OPIC, MIGA, and EBRD together with a project financing?
Papua New Guinea
Examine political-risk structures for all mining projects, including Lihir.
Escondida
Project finance without the banks
Phu Kham
Combination of mezzanine debt and project finance within a commercial political risk package (not ECAs). Also wraps in some equipment-lease financing.
Infrastructure Project Finance
DAY SEVEN
Risk allocation for each sector
- Highways/tollways/bridges/tunnels
- Airports
- Ports
- Railways/undergrounds
- Hospitals/prisons
- Water/sewage
Sectors of interest
- Power
- Transportation
- Communications
- Social services
- Government/military services
Traffic studies
- Methods
- Ramp-up
- Due diligence
- Urban mass transit
Case studies:
N3 Tollway
What the banks did to flawed traffic studies?
Gautrain
Why this could never be a true PF deal.
What is the BEE aspect?
Superhighway BOO/BOT
How much of a real estate component should be counted? Are the interchanges and corridor developments bankable?
Laem Chabang Port
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’s first water supply BOOT with the imaginative structuring of EIB.
Bangalore Airport
Why is the airside component backwards?
Contractor usage
- Tender conditions
- Delay/completion architecture
- PPP Special-Purpose-Vehicles (SPVs)
Public-Private Project Finance
DAY EIGHT
The fit of PF 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 PPPprograms
Role of the Government PPP Unit
Does the One-Stop-Shop really work?
What policies and procedures are needed?
What is the interface with local authorities?
Philippines BOT Law
Why has this simple Act spawned sufficient private-sector investment?
PICKO-PIMAC/KDI, South Korea
Korea set in place probably the most aggressive government co-spend.
Partnerships Victoria
What new policies and strategies are developed? Lessons?
PPP tender/bidding
Case study:
Croydon Tramlink
Why the tender overturned them?
Risk matrices
- Logic diagrams
- Four-by matrices
- Who takes what risk?
World's best practices
Case studies:
Annuity Highways
Why is this the simplest output specification in the world? How does an Annuity Payment work? Tolled vs.Untolled? The right of substitution?
Highway 407
How did Value Engineering contribute?
Tactics to maximise return/value?
Penang Bridge (OMT)
Funded by Islamic bonds, the government retains the right to renationalise it.
Mangaung Prison
It is so successful that prisoners re-offend to avoid getting transferred there!
Mildura Base Hospital
Why was the preferred consortium 'fired' during the last-minute negotiations?
Supported Debt Model (SDM) Schools
Why was the SDM tried on this package?
What was the sponsors' resultant funding structure?
Project Finance Risk & Recovery
DAY NINE
Risk management
- The 8 options (and structuring solutions)
- Avoidance, deferral, reduction, retention, transfer, sharing, limitation, mitigation
Case studies:
BOO Cogen, USA
Why the first 144A project-financed bond deal default was in the USA.
Iridium World
Why does Motorola consider it a success! What market-risk pointers were evident?
Cawse/Bulong, Australia
Why did the144A project-financed bond market proceed?
Orly VAL
Why did the French banks support an airport-city link when urban mass-transit traffic PF history is so appalling?
Two types of project finance
- Type 1: Sponsor support/completion test
- Type 2: Contractors' package
- Upside limits/liquidated damages/delay-in-startup
Project finance as an option
- The 3 phases of project finance
Case study:
East Kemptville, Canada
The company signalled to its bankers that it might "take a walk" and it did.
Techniques of risk assessment
The seven (7) risk systems
- Statistics
- Modellers
- Benchmarking
- Checklists
- Risk management
- Jigsaw/structural
- Project finance
Case studies:
Phoenix, Australia
Identify when a support will never work.
Lihir, Papua New Guinea
How a company spending $148 million for a feasibility study encounter repayment problems for technical reasons?
Due diligence
- Legal
- Accounting/tax
- Environmental
- Engineering
- Market/traffic/subscribers
- Intelligence
Case study:
Victoria Hospitals Cogen, Australia
How the risk-management study identified grid weaknesses.
Basel II – Bank capital adequacy and scoring
- The Big Four Banks - Results
- Internal Ratings Based (IRB) System
Risk-management measures
- Value-at-Risk (VaR)
- Scoring
- Soft systems methodology
- Country/sovereign risk
Project finance modelling
- Base Case
- Downside Cases
- Breakeven Cases
- Upside Case
Forecasting
- Backcasting
- Cyclicality
- Competitiveness
Case study:
Equate, Kuwait
See how quickly this project (almost) defaulted. What could the banks do?
Risk management – Structuring
Case studies:
Optus Cable Roll-out
Environmental risk!
Brisbane Airtrain
See how the primary-secondary circles work in structuring this project.
Corex, South Africa
Why Voest Alpine had to pay $180 million to correct the completion problems.
Limit setting
- Portfolio profile
- Credit risk
- Country limits
- Sector risks
Case studies:
Ottwon Asia
Why did banks finance these projects knowing they could create pollution?
Hero Asia
Why can the bond markets sometimes take environmental risk?
Role of the credit/investment committee
- Credit scoring
- Loan compliance
- Approvals matrices
- Pre-committee screening process
Anticipating problems/failures
The Rule of 3
Case studies:
Western Harbour Crossing
Why did this carefully-controlled structure fail?
One.Tel
How did banks commit to a company selling services for less than it cost?
The 7 main tools
- Cascading covenants
- Reporting/compliance
- Audit/expert review
- Liquidity management
- Reserves
- Traps/sweeps
- Litigation trail
Case study:
Sithe Independence
The FA technology (GE) was a technology risk. How much LDs were needed?
DAY TEN
Role of lawyers
- Actions upon Default
- Cross-border considerations
- Equity
- Trade-ons
- SPV management
- Security/collateral
- Arbitration
Legal states of play
- Bankruptcy
- Informal insolvency
- Administration
- Receivership/liquidation
Roles
- Agent/custodian/trustee
- Project financier
- Team composition
- Experience
- Credit committee
- Workout/Special loans division
Workouts
- Styles
- Break-up/reshaping
- New monies
- Equity/mezzanine
- Preparation for sale
- Patience
- War
- Risk ranking
- Matrix
- Building in hazards into the forecasts/Scenarios
Case study:
Marview, Australia
The flexibility developed from backcasting and 'bottom-fishing' saved the day.
New techniques
- Securitisation
- CLOs
- Partial risk
- Take-outs
- Completion enhancement
- Mezzanine/convertibles
- Combination packages
- Sequential structures
Case study:
Loy Yang, Australia
How did Chase repackage this mis-priced deal?
Citibank's CLO
The international and sector approach taken on emerging-markets projectfinanced CLO in the PF bond market.
The eight (8) common threads