International Project Finance & Cashflow Modelling Workshop

Featuring: Structuring large projects and accessing the most competitive funding in the oil and gas, energy, transport and other infrastructure sectors Using and analysing pro forma estimates and cashflow models Key legal risks in projects How to work with export credit agencies, multilateral institutions and other official players Using the capital markets for project transactions Cross-border leasing Managing interest rate, currency and commodity price volatility Credit derivatives and their applications in project finance International Project Finance Training Course: 4-day session Today, global markets for project finance are being redefined. In this environment the need for skilled analysis of project structures is acute. Banks, private investors, project developers, equipment suppliers, official creditors, and providers of credit risk enhancement must all be properly equipped to assess project risk and prospects for future performance in both in existing portfolios and new transactions. While differentiating between countries and industrial sectors, this program is designed to help participants break the project analysis process into its component parts. They are exposed to techniques for assembling market information and making qualitative judgments, as well as being given tools for conducting thorough quantitative financial analysis and cash flow forecasting. Cases and examples from around the world that have successfully weathered recent market upheavals, as well as those that have deteriorated, are used extensively to ensure understanding and give participants practice in the application of concepts. The program also examines differences between sources and providers of finance and risk support. This includes the bank market, euro-bond issuance, 144A private placements and even sources of local currency funding. Lectures cover many recent examples of securitization, leasing and structured financing techniques used in creative ways in project financing and other deals. Additionally, careful attention is paid to the many techniques for enhancing the terms of funding including Multilateral Agencies like the World Bank /IFC/MIGA, as well as official providers like Regional Development Banks like IADB or EBRD, Export Credit Agencies and even Private Sector Insurance providers. Elements unique to financing projects in the oil and gas and electricity sectors are discussed as well as infrastructure projects like transport, and even water, which has long had difficulty in attracting private sector investment due to special characteristics. Cashflow Modelling Training Course: 1-day session This is a stand-alone cash flow modelling workshop. In a hands on session, using software developed by "ProFin Tools, participants will create a model for a LNG Plant suitable for examining project debt capacity as well as return on investment. Supported by: To find out more about accommodation, and places of interest within Paris please visit; http://en.parisinfo.com/
Day 1 Structuring projects and creating a security package; discovering the most efficient sources of debt finance; introduction to cash flow modelling International project finance markets today Current challenging markets for project finance transactions BOO, BOT, BOOT, BLT and other approaches to Private investment in public infrastructure Who are the players? Identifying and allocating risks What can go wrong ? Examples: financing pipelines, power projects and toll roads Sources of finance: financing checklist Traditional and contemporary sources of finance: bank loans Banks and the current club loan market Syndicated loan financing What security do banks want? Development bank "A" and "B" loans and other funding sources Current inter-creditor and other issues Cashflow modelling workshop: analytical techniques and credit assessment. Financial modelling and cash flow analysis - The view of lenders: DSCR and PV coverage - Equity considerations: IRR and NPV - Approaches to evaluating the cost of capital project returns vs. equity returns - Forecasting techniques and limitations Case study: working with cash flow modelling software to finance a gas processing plant. Participants break into small groups to prepare a case study that analyses a fertilizer project. A computer simulation will be used to model cashflows. Groups will present their solutions. Day 2 Infrastructure projects; power; export credit agencies Case discussion Legal issues in project finance Legal environment and regulatory conditions Commercial points and legal points in various project structures: - Incorporated and unincorporated joint ventures - Partnerships and limited partnerships - Key contractual agreements and structuring considerations - Developing a term sheet Using capital international and local markets in project finance U.S. private placements and Eurobond issuance for projects Comparing bond issuance to bank loans - Nature of investors, timing and flexibility - Project size and relative cost - Security requirements - Negative arbitrage issues - The due diligence process / road shows Rating agency considerations Export finance techniques Guarantees and insurance vs. funding Buyer and supplier credits Bank incentives inherent in ECA programs Costs and availability Securitisation of ECA guarantees Choosing a special purpose vehicle Case study: financing a power plant. Risk allocation among various project participants in an Asian Power project. Testing the project's cash flows under varying scenarios with a cash-flow simulation model.What are acceptable DSCR levels? What returns does equity look for? When is bond issuance a realistic option? Day 3 Other sources of finance and political risk support; transport projects Liberalising power markets Market forces and the effect on electrical supply Fragmentation of electricity generation Gencos/transcos/discos Merchant power plants (MPPs) Rating agencies' analytical model What happened in California? Further roles for multilateral development agencies (MLA’s): political risk support World Bank Group Regional multilateral development banks (ADB, IADB, EBRD, EIB, Islamic Development Bank, etc) Bilateral Agencies (OPIC, Proparco, FMO, etc.) Other sources of political and risk insurance Private sector providers Mono-line insurers Financing airports, ports and other transportation projects Ownership structure Outright and partial government ownership Long-term concessions Privatisation of seaports vs. airport financing Exercise: constructing a risk matrix for airport projects Case study: airport finance; negotiating a term sheet. Participants will break into groups to work on this limited recourse project structure. Discussion will focus on project risks, their allocation through contracts, the mix of financing, cash flow projections, as well as rating agency considerations in evaluating the proposed financing structure. Day 4 Leasing; water and sanitation projects; risk management with derivatives Leasing applications Leasing applications in projects Evaluating cost Case examples: Colombia and Brazil Water infrastructure Special features of limited recourse projects in water and sanitation Array of structures: service agreements, leasing, BOT, privatisation Who are the players? Investors and lenders? Desalination and electricity projects Case examples and PPP transactions Case study: financing a water treatment plant. Participants will break into groups to prepare a case study concerned with financing a wastewater treatment plant in Latin America Price volatility and risk management with derivatives in project finance Financial price movements today: volatility and risk Using interest rate and currency swaps to manage risk in projects Using options: caps, floors and collars Commodity-linked derivatives and securities Oil, gas and electricity hedging with case examples of application Case Study: Interest Rate and Currency Risk Management for a Power Project. Day 5 Project finance modelling workshop Participants will spend a day building a model for Ras Laffan, a liquified natural gas (LNG) project in Qatar. They will assess a wide range of scenarios in order to test a limited recourse financing package for debt capacity and suitability for investment. With discussion of common approaches to modeling with Excel, ‘dos’ and ‘don'ts’ as well as the practical use models for negotiations. Modelling workshop overview: objectives and approaches Constructing a model / common myths Variations by project type Structuring the model and organising the data to create a cashflow statement Developing the assumptions page Construction costs and timing Operating cost, plant capacity Usage, fixed and variable costs Reinvestment, plant expansion, productivity shifts Developing the profit and loss and balance sheet Factoring in reserves Considering currencies Tax calculations Financing section Equity first or pro rata Manually designed equity subscription Draw-down of debt linked to specific contracts or expenditure or in a hierarchy Ratios and sensitivity analysis: objectives and limitations Measuring debt capacity and investor return using modelling output for initial project vetting supporting on-going negotiations Workshop: the program’s fifth day session is a stand -alone cash flow modelling workshop. In a hands on session, using software developed by “ProFin-Tools”, participants will create a model for an LNG Plant suitable for examining project debt capacity as well as return on investment. Course summary and close