You will learn:
- How projects/PPPs are structured and financed: what the options are
- How project risks are identified, evaluated and mitigated
- Cash flow models
- Sources of equity and debt funding
- The essential features of project documents
- What PFI and PPP are: advantages and disadvantages
- Case histories / studies: why some projects succeed and others fail
Who should attend?
This course is designed for staff responsible for major projects in:
- Construction companies
- Project contractors
- Facilities management companies
- Government and public service offices
- Public service utilities
- Commercial banks
- Project investment funds
- Project Insurance companies
- Project law firms
- Engineering consultants
- Environmental consultants
- Development agencies
Course level
The course covers a wide range of knowledge and experience.
Concepts are described from first principles. However, a basic knowledge of finance or accounting at the outset will be of help to gain most from the course.
This course does not require the use of personal computers.
Supported by:
Day 1
Overview
- Characteristics of projects: public v. private
- Key players in a project financing
- Terminology and definitions (BOOT, PPP, IFI, IPP, PPA, etc.)
- Origins and recent history of project finance
- The project financing process
Funding structures
- Conventional loan security v. project finance structures: advantages / disadvantages
- On/Off balance sheet: rationale, issues and criteria
- Proportions of debt and equity
Sources of debt and equity
- Equity funds
- Sources: incl. private equity and sovereign funds.
- Key issues for Investors
- Debt
- Development bank funding
- Export credits
- Commercial loans and syndication
- Make-up of Term Sheet
- Bond issues
- Key issues for lenders
- Quasi-equity and subordinated debt: role, types
Risk identification and analysis
- What is risk? Why are lenders risk averse?
- Impact of Basel II
- Identification of risk types: tech., completion; financial; etc.
- Environmental risks: EQUATOR Principles
- Evaluation of risk impact
- Creation of risk matrix
- Risk mitigation
- Role of capital markets
- Role of insurance: commercial, financial, political.
- Debt/Equity ratios: risk and project type.
Day 2
Project appraisal and process
- Cash-flow/spreadsheet make-up
- Issues to note in cash-flow models
- DCF and IRR
- Criteria and Ratios used by lenders and investors
- Cross-sector review of ratios and IRRs
- The bid process
- Documents required: Information memoranda, etc.
- Role of financial / technical / legal advisers
- Advantages / disadvantages of project finance
- Common problems arising in projects
Project documents: key clauses and features documents:
- Construction contracts
- Supply contracts
- Off take/sales contracts
- O & M contracts
- Loan Agreements
- Shareholder agreements
- Project insurance
- Essential features of UK PPP
- PPP/PFI - type concession agreements
Clauses:
- Payment clause structures
- Force majeure
- Termination
- Step-in rights
- Arbitration
- Commercial regime
- Guarantees: types
Sector review, discussion and analysis
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.
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.
- Thermal power (oil, gas, coal, nuclear)
- Hydropower (large and mini-)
- Power transmission and distribution
- Renewable energy (wind, tidal, bio fuels, etc.)
PPP and public services: key issues
- What is “PPP”: why the recent interest?
- The Bid Process and PPPs
- Public sector comparators and value for money analysis.
- Advantages / disadvantages of PPPs
- Common problems arising in PPP projects
Real-life case histories from developed and emerging markets worldwide will be taken and discussed for projects in all the sectors mentioned below.
- Water
- Hospitals
- Schools
- Prisons
- Govt. and office buildings
- Defence projects
- IT
Day 4
Transport sector
Real-life case histories from developed and emerging markets worldwide will be taken and discussed for projects in all the sectors mentioned below.
- Roads (motorways and urban) and bridges
- Rail; urban and light rail
- Ports and maritime
- Airports; ATC
Miscellaneous sectors
Real-life case histories from developed and emerging markets worldwide will be taken and discussed for projects in all the sectors mentioned below.
- Property: commercial buildings; hotels, tourism
- Process industries: aluminium; steel; cement
- Telecommunications
Course summary and close
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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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