Course dates
The course will feature:
- Policy and Risk Analysis of Merchant Power versus PPA Contracts
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Independent Power and Analysis of Technology Choice
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Debt Structuring and Project Finance Analysis of Power Projects
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Tariff design in Purchase Power Agreements
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Economic Analysis of Reasonable Tariff Levels
- Financial Modelling of Power Projects
Who should attend
The course will be of value to professionals in the following areas:
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Corporate Finance / Corporate Treasury
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Capital Markets
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Audit / Product Control / Risk Management / ALM
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Research & Analysis
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Sales & Trading
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Investment Management
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Origination
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Securitisation / Syndication
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Structured Finance
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Money Markets / Repo
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Systems Programming
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Funding
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Government / Agency Funding & Investment
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Regulation / Compliance / Documentation
Course overview
Analysis of Independent Power Projects can involve a variety of economic, financial, policy and legal subjects ranging from assessing the price of power purchase agreements to negotiating covenants, debt size and the repayment structure of a term sheet. By attending this hands-on course participants will come away with a comprehensive set of analytical skills as well as an understanding of underlying theory behind the variety of issues that can arise in developing, financing and contracting for Independent Power Projects.
Case studies from different areas of the world will be used to illustrate regulatory policy issues, economic analysis of different technology options, risk premiums associated with power contracts, appropriate hurdle rates and cost of capital and debt capacity.
Day 1
Independent Power in the Context of Alternative Electric Power Policy
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Definition and History of Independent Power
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IPP’s in the Context of Alternative Electricity Policy Options
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State-owned power utilities
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Vertically owned regulated systems
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Single Buyer and power contracts
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Merchant Power and retail competition
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Arguments For and Against Different Policies
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State owned systems and power outages, inefficient plants, high losses
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Vertically owned systems, regulatory costs, nuclear power in the U.S.
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Merchant power systems, California crisis, merchant meltdown and price increases
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Purchase power contracts, Philippines, Pakistan, Indonesia
Case studies of Philippines
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Context of Power Shortages
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Structure of PPA Contracts
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Selected Plant Case Studies
- Postscript
Day 2
Project Finance Terms and IPP Transaction Structure
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Overview of Selected Project Finance Terminology
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Importance of Phases in Risk Analysis, Accounting and Modelling Project Finance
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Role of Contracts and Integration of Contracts in Project Finance
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Risk Analysis in Project Finance
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Theory of Using Project Finance in Investment Decisions versus Traditional Project Financial Analysis using NPV and WACC
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Use of Debt Capacity to Measure Risk
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Lessons on Benefits and Problems in Project Finance from Non-Electric Case Studies (Ras Laffan, Eurotunnel, Eurodisney)
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Project Finance Model PPA versus Merchant Plants
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Importance of Cost of Capital in Electricity Generation
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Construction of Model with Alternative Plant Inputs
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Effect of Cost of Capital on Technology Choice
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Effect of PPA on Capital Structure of Off-taker
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Effect of PPA on Cost of Capital and Debt Capacity in Project Finance Model
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Cost of PPA with and without Capital Structure Penalty
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Effect of PPA on Technology Choice
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Debt Structure of IPP with and without PPA Contract
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Case Study: Evaluation of Alternative Possible Contract Structures
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Architecture of Project Finance Models with Comprehensive Debt Structure
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Programming Different Phases in Project Finance Model
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Programming Sources and uses of funds statement during the construction period
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Computation of Cash Flow, Waterfall, Tax Payments and Financial Statements
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Equity IRR with Different Debt Structure in PPA Case – Level versus Annuity versus Debt Sculpting
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Computation of Debt Capacity and IRR with Alternative Repayment Structures – Direct and Indirect Effect
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PPA and tariff design
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Theory and Practice of PPA Pricing – A,B,C, and D components for coverage of fuel cost, variable O&M cost, fixed O&M cost and capital recovery
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Capacity charge in PPA agreement versus capacity price in market model
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Tolling versus PPA Prices
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Case Study of computing and evaluating PPA Tariffs: Enron Dahbol
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Project Finance Model with PPA components
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Optimization of both debt capacity and PPA tariff using solver
Day 3
Project Finance Terms and IPP Transaction Structure (continued)
Documents and Finance Sources
- Coordination of PPA with Other EPC, O&M and Loan Agreement
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Default and other Provisions in Loan Agreements
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Equity support agreement
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Interest rate swaps in project finance
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Bonds versus Commercial Banks
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Insurance and International Financial Institutions
- Credit Enhancements and Security
Centrally located hotel in Paris, Paris, France
This programme takes place on a non-residential basis at a hotel in central Paris. Non-residential course fees include training facilities, documentation, lunches and refreshments for the duration of the programme. Delegates are responsible for arranging their own accommodation, however, a list of convenient hotels (many at specially negotiated rates) is available upon registration.
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Ed Bodmer
Edward Bodmer has created innovative forward pricing, productivity measurement and investment valuation software for consulting clients throughout the United States. He has taught energy economics and finance throughout the world, and formulated significant government policy and corporate strategy in the U.S.
Mr. Bodmer's consulting clients include investment banks, commercial banks, research institutions and government agencies on a wide variety of complex valuation and advisory matters. He has constructed a unique framework for electricity price forecasting and valuation using production cost modelling techniques combined with option price theory and Monte Carlo simulation.
Mr. Bodmer is also an adjunct professor at leading University where he teaches courses in microeconomics. Along with his practical experience that covers a multitude of major advisory projects, he has taught specialised courses in financial modelling, electricity pricing, option valuation, mergers and acquisitions and contracting to investment banks, commercial banks, industrial corporations and electric utility companies.
Mr. Bodmer was formerly Vice President at the First National Bank of Chicago where he directed analysis of energy loans and also created financial modelling techniques used in advisory projects. He has used the models in providing expert testimony on subjects ranging from capital structure to investments in multi-billion dollar nuclear plants to complex valuation of new investments.
Mr. Bodmer received an MBA degree specialising in econometrics (with honours) from the University of Chicago and a BS degree in finance from the University of Illinois (with highest university honours). He has written many articles and is in the process of completing a textbook on valuation of electricity assets.
Courses run by this instructor
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.
10-13 Jul 2012 (London, UK)
This intensive four-day course will shows delegates how to build a power model from a skeleton model incorporating a range of Excel and applied financial techniques.
Each session focuses on a particular aspect of modelling and applies it to the case model.
18-22 Jun 2012 (London, UK)
17-21 Dec 2012 (London, UK)
This course will provide you with a general background on economic and financial issues in the context of renewable energy investments. As cost of capital is one of the most important elements in renewable project costs, the course will demonstrate how various transaction structures affect debt and equity costs. After completing the course, participants should understand project finance terminology; the economic and financial theory that underlies different transaction structures; the motives of different parties in a transaction; and, the importance of various financial and contract provisions.
11-14 Sep 2012 (Singapore, Singapore)
This intensive four-day Financial Modelling in Excel for the Power Sector course will shows delegates how to build a power model from a skeleton model incorporating a range of Excel and applied financial techniques. Each session focuses on a particular aspect of modelling and applies it to the case model.
24-26 Sep 2012 (Hong Kong, Hong Kong)
This Fundamentals of Developing an Independent Power Project course will provide you with a greater understanding of: 1. The necessary conditions (legal, regulatory, market/commercial, technical, financial) for the successful development of IPPs including renewable energy projects; 2. The risk management tools and
techniques available to maximise value and to understand, calculate and manage risk in IPPs including
renewable energy projects; 3. The requirements of lenders necessary to be met to secure project financing for IPPs including renewable energy projects.
18-19 Jun 2012 (London, UK)
After a gap of 15-20 years and with the need to observe Climate Change requirements, nuclear power is now back on the agenda for many governments. The challenges, however, are daunting. Nuclear power is expensive, the funding needs huge, and nuclear projects take years to implement. Finance, therefore, will be a key issue and on the critical path for many projects. This course addresses the issues and provides a detailed understanding as to the financial difficulties the sector will face.
22-25 May 2012 (New York, United States)
This intensive four-day will shows delegates how to build a power model from a skeleton model incorporating a range of Excel and applied financial techniques. Each session focuses on a particular aspect of modelling and applies it to the case model.
12-15 Nov 2012 (Singapore, Singapore)
The Energy Risk Management: Mastering Volatile and Complex Markets course is a comprehensive and systematic introduction to risk management for complex energy markets. The course will detail why and how risks in energy – particularly gas and electricity - are more acute than in other traded market sectors, and how classic risk management techniques must be adapted and extended to meet these demanding conditions.
16-19 Jul 2012 (London, UK)
People coming to energy risk management for the first time are taken aback by the extreme market conditions that are commonplace in the complex markets of oil, coal, and above all, gas and electricity. Levels of volatility and basis risk are unprecedented: and there are additional risks that are unique to energy. This course shows delegates how to deploy traditional risk management tools in the challenging context of volatile energy markets, and to extend these techniques to master the unique risk characteristics of gas and electricity.
20-21 Aug 2012 (Singapore, Singapore)
This Traded Electricity Markets course is a comprehensive and systematic introduction to traded electricity markets. The course will detail why and how electricity – the most challenging of all commodities – presents complexities more acute than in other traded market sectors, and how to understand, model and manage these demanding conditions. Case studies will illustrate how companies have resolved these issues, including Centrica, one of very few companies to have made a successful entry into this most difficult of markets.
25-26 Jun 2012 (London, UK)
10-11 Dec 2012 (London, UK)
This Traded Electricity Markets course is a comprehensive and systematic introduction to traded electricity markets. The course will detail why and how electricity – the most challenging of all commodities – presents complexities more acute than in other traded market sectors, and how to understand, model and manage these demanding conditions.
21-24 Aug 2012 (Lagos, Nigeria)
Many business models fail due to poor planning,
haphazard development, inherent errors and lack
the ability to provide clear financial analysis. This course shows delegates how to build a power model from a skeleton model incorporating a range of Excel and applied financial techniques.
22-25 Oct 2012 (Paris, France)
Electricity Economics and Financial Analysis is a four day intensive, technical hands-on course in which attendees receive comprehensive instruction on the theory and practice of making price forecasts and assessing risk in the electricity generating industry.
16-18 Jul 2012 (Singapore, Singapore)
This intensive three day hands-on course will provide a
comprehensive analysis of issues associated with independent electric power projects ranging from economic analysis of PPA contracts to financial modelling of projects. In working through analysis of projects, a mixture of case studies, lectures and analytical exercise will be used to evaluate electricity price forecasts, debt structuring, technology choice, cost of capital, and architecture of financial models.
27-31 Aug 2012 (New York, United States)
This course will provide you with a general background on economic and financial issues in the context of renewable energy investments. As cost of capital is one of the most important elements in renewable project costs, the course will demonstrate how various transaction structures affect debt and equity costs. After completing the course, participants should understand project finance terminology; the economic and financial theory that underlies different transaction structures; the motives of different parties in a transaction; and, the importance of various financial and contract provisions.
12-16 Nov 2012 (Singapore, Singapore)
This course will provide you with a general background on economic and financial issues in the context of renewable energy investments. As cost of capital is one of the most important elements in renewable project costs, the course will demonstrate how various transaction structures affect debt and equity costs. After completing the course, participants should understand project finance terminology; the economic and financial theory that underlies different transaction structures; the motives of different parties in a transaction; and, the importance of various financial and contract provisions.
23-25 Jul 2012 (Paris, France)
30 Jul 2012 - 3 Aug 2012 (Accra, Ghana)
This Financing Independent Power Projects (IPPs) and Power Stations course on IPP project finance best practice is a useful tool for lenders and borrowers alike. The course director will walk candidates through the best practices of IPP project finance and at the end of the course candidates will be better prepared to successfully navigate through the current credit climate.
Course dates