Introduction

Project finance is the funding (financing) of long-term infrastructure, industrial projects, and public services using a non-recourse or limited recourse financial structure.  it is the financial analysis of the complete life-cycle of a project. Typically, a cost-benefit analysis is used to determine if the economic benefits of a project are larger than the economic costs.

This course designed and delivered by the International Faculty of Finance examines the project financing process in detail, focusing on financing term sheets and documentation.  Delegates then progress to a study of the project financing challenges of today, using case studies and group discussions to apply the skills they have acquired. 

This course will enable you to:

• Analyse why and when sponsors use project financing techniques
• Widen your understanding of the project finance techniques and the jargon used
• Examine of the key sources of limited-recourse debt
• Appreciate of the lender’s approach to risk
• Understand how key risk factors drive structure and loan pricing Learn how project models are built and used to balance equity against debt
• Appreciate how project models are used to optimise debt amounts, maturity and re-payment

Who should attend?

The courses will be valuable to professionals in the following areas:

• Bankers/Investment Bankers
• Project Finance Modellers
• Financial Advisors
• Sponsors/Project Joint Ventures
• Project Developers
• Government/PPP Agencies
• Public Sector Managers
• Export Credit Agencies
• Multilateral Agencies
• Accountants/Taxation Advisers
• Financial Analysts
• Share market Analysts/Brokers
• M&A/Buyout Specialists
• Privatization Executives
• Company Treasurers/Directors
• Credit Committee Staff
• Rating Agencies
• Project Managers/Engineers
• Project Consultants
• Investment/Portfolio Managers
• Insurance Advisers/Brokers

Course Outlines:

Day1

What is Project Finance?

• Definition – “Project Finance” as opposed to financing of a project
• Limited-recourse and non-recourse finance
• Origins of project finance
• Who uses project finance and why?
• What is the downside?

Day 2

The Project Finance Process

• The Players and their interests
• Ownership structures
• Key project contracts
• Role of advisers:
• The financial feasibility study/debt structuring
• The information memorandum
• Debt underwriting/syndication
• Financial close
• Post-close monitoring

Day 3

Sponsors and Lenders/ The Lender’s Risk Analysis

• Different risk/reward objectives of sponsors and lenders
• Balancing equity and debt
• Different types of debt – senior/ subordinated/mezzanine
• Structural & pricing drivers
• Key ratios – annual debt service, loan life and project life covers
• Balancing equity and debt
• Assessing the Risks
• Macro risks
• Completion risk
• Operational risk

Day 4

Other Sources of Debt Finance / Risk Mitigation

• The bond markets
• Credit enhancement through guarantees
• Islamic finance
• Private political risk insurance market
• Export credit agencies
• Multilateral agencies/development banks
• Sponsor co-financing

Day 5

Project Financing Documentation

• The term-sheet – purpose, legal status, binding/non-binding aspects
• Term-sheet/documentation provisions:
• Term-sheet interactive exercise
• Legal opinions
• LMA standard terms
• Security and credit rights
• Payment waterfall
• Collateral and assignment of contract rights
• Rights of the controlling classes, inter-creditor issues
• Reserve accounts, cash sweeps, profit distribution controls
• Refinancing risk

• Project types
• Conclusion