Investing in Infrastructure Assets

This two day training workshop is aimed at providing investment practitioners with answers to: Why the recent market interest in infrastructure and public utility investment? What are the risks associated with such investments? What are the characteristics of public service assets in different sectors? What risks and rewards can be expected from such investments? In this programme the delegates will gain an understanding of: How governments finance investment in public service assets: public vs. private What are public-private partnerships (PPP)? What are their advantages and disadvantages? What are the key risks? How can these be mitigated? What funding structures prevail in the sector? How much debt? How much equity? What kinds of investor returns are achievable and over what period? What are the key ingredients of the underlying contractual framework? How can investors protect themselves against political interference? Who should attend? Asset Managers Pension Fund Managers Life Insurance Fund Managers Sovereign Wealth Fund Managers Private Equity Fund Managers Project Consultants Lawyers Project Accountants Public Service Utility Regulators Investment Analysts Training methodology Day one will provide an introduction and overview of the sector, plus all the ingredients of what makes a successful project: risk analysis; mitigation measures; funding structures; sources of funds; performance measures for investors and lenders; contractual framework. Day two will look at case studies of internationally-based projects actually implemented in a range of sectors including roads, rail, metros, ports, airports, power, renewables, waste and social.
Day 1 Introduction and overview Characteristics of infrastructure and public service assets: Public vs. private What are PPP/PFI concessions: Why the recent interest? Advantages/disadvantages of PPP concessions On/Off balance sheet: Rationale, issues and criteria Common problems arising in PPP projects International perspectives: UK vs. Europe vs. North America Terminology and acronyms (PPP, IFI, IPP, etc.) Investment in projects vs. utilities? Risk identification and analysis How are infrastructure/public service projects/utilities funded? What are the structures? Utilities vs. new projects What is risk? What are the key risks? Identification of risk types: e.g. technical; commercial; political Environmental risks: EQUATOR principles; investor constraints Impact of Basel III on commercial banks Risk mitigation and key contractual elements How risks are mitigated, e.g. key contractual structures: Regulated tariffs; sales contracts; availability payments Role of the capital markets Role of insurance: Commercial, financial, political Funding structures and proportions of debt and equity Cross-sector comparisons Sources of finance Equity funds Sources and key issues for investors Private equity and sovereign wealth funds Sources of debt Development bank funding Export credits Commercial loans The bond markets The role of mezzanine capital, quasi-equity and subordinated debt Financial evaluation of opportunities Cash-flow models for infrastructure projects and utilities What criteria to calculate and issues to look out for DCF, EBITDA, NPV and IRR: What do they mean? Criteria and ratios used by lenders and investors Day 2 Applications Real-life case histories for existing public utilities and new construction infrastructure and public service asset projects will be discussed for a range of international projects and utilities in all sectors, as below. Particular attention will be made to funding structures and sources, the risks facing investors, and the financial outcomes. Transport Roads (motorways and urban) Road maintenance and street lighting Tunnels and bridges Rail: inter-city Rail; urban and light rail Ports and maritime Airports PPP/PFI and public services Water and waste management Hospitals, schools, prisons, government and office buildings Defence projects IT sector Energy sector Thermal power (oil, gas, coal, nuclear) Hydropower (large and mini) Power transmission and distribution Renewable energy (wind, solar, biofuels, etc.) Oil and gas pipelines Course summary and close