Project Finance Workshop

This Euromoney Project Finance training course will provide you with an intensive overview of the core principles and practice of project finance. You will gain a greater appreciation of 'project pitfalls' as well as grasp a thorough understanding of the crucial factors and techniques used in structuring project financings. How will this project finance training course assist you? This 4-day Project Finance training course will provide you with the skills and knowledge to: Better structure your project finance deals Comprehend the uses and abuses of financial modelling i.e forecasts vs. reality Understand essential credit issues in assessing project finance proposals Get to grips with funding choices and capital structuring issues Gain the perspective of the equity investor Understand risk allocation and mitigation Understand corporate distress and implications for project finance Who should attend? Using a core case study and other examples of the use of Project Finance this hands on workshop is designed for personnel involved in project procurement, development and construction, investment, financial and technical appraisal and financial structuring and ongoing project management for large scale projects working for; Project developers and investors Construction companies Government and other Public Sector Agencies Equipment suppliers Commercial Banks Investment banks Development Finance Institutions Export Credit Agencies Infrastructure Funds Accountancy firms Law firms Financial advisors and consultancy firms Infrastructure specialists Participant existing pre-requisites Although limited practical Project Finance experience has been assumed, to obtain maximum benefit from this training programme participants should already be familiar with the core aspects of:- Corporate financial analysis techniques The main functions in Excel The principal banking and Capital Markets debt products Investment appraisal techniques ( e.g. IRR, NPV) and the fundamental principles of company valuation Banking documentation Supported By:
Day 1 Registration commences at 8:30 Programme runs from 9:00 - 5:00 daily Key issues in project finance and risk management risk analysis and underlying business assumptions Lessons of experience - an overview of crucial issues in Project Finance Commercial motivations for Project Finance Project Finance vs. the financing of projects The critical issue in all project financings Risk and return Factors influencing financing techniques and the syndication process The evolution of Project Finance – how the market has developed Activity in the Project Finance market Factors driving the demand for Project Finance Understanding the roles and motivations of the key stakeholders in a project An overview of key issues in project finance Review of a Project Finance transaction to illustrate key aspects of the transaction and subsequent developments The Project Finance “route map” - an overview of the key issues in evaluating and structuring a Project Finance transaction Risk evaluation in Project Finance Key risks – construction, operating and financial Typical approaches to risk allocation Overview of the approach to a credit analysis for power projects to illustrate key elements of a rating Exercise: participants review background on the core case study project and prepare a summarised “risk rating” based on the risks and mitigants in the project Evaluating the business plan and the underlying assumptions Feasibility studies and lessons of experience - are the assumptions realistic? Case study: participants evaluate the underlying operating assumptions for an assigned project. Day 2 Evaluating the project financial viability, debt capacity and sources of debt finance An overview of the project financial statements Review of a generic Project Finance spreadsheet to understand the main influences on the project’s viability The impact of capital and operating costs on project viability Using nominal vs. inflation adjusted figures Use of sensitivities and Monte Carlo simulations The relationship between leverage, return, DSCR and project viability Building and sensitising the operating cashflow Useful Excel sensitivity functions Assessing the financial sensitivity of the core case study project to key risks Key factors influencing the project IRR Case study: review of the core case study project to examine key sensitivities. Sources of debt financing in projects and debt capacity Rationale for Project Finance vs. other debt financing techniques Debt capacity - Using projected cash flows as a basis for assessing debt servicing capacity Export Credit Agencies and Development Banks; bank debt vs. bonds; senior vs. subordinated debt Use of Islamic Finance techniques Interest, foreign exchange and commodity price management issues in Project Finance Review of selected Project Finance transactions – risk and return in structuring Project Finance transactions Impact of the credit crisis Case study: review of the core case study project to assess the debt servicing capacity and key sensitivities. Day 3 The equity investor’s perspective, commercial aspects of documentation Financial yardsticks used by investors: uses and limitations Project investment appraisal techniques Corporate cost of capital as a basis for evaluating project returns How equity investors seek to mitigate risk in project finance The trade-off between leveraging equity returns and the need to provide credit support Assessing the impact of operating relationships between the project sponsors and the project company on equity returns Subordinated debt vs. equity and factors influencing the choice Extracting cash from the project company Exercise: evaluating comparative returns from potential projects Case study: bidding for a concession Case study: review of the core case study project to develop a capital structure that balances the need of debt and equity providers Commercial issues in project finance documentation Structure of loan documentation Key covenants and potential complications Concession agreements Structuring off-take agreements Dealing with market risk Choice of construction contract Completion and cost overrun guarantees Shareholder lock-ins Banking security Intercreditor issues Day 4 Contract structuring and problem projects Case study: structuring third party credit support and security. Participants refine a proposal for the core case study project to cover the capital structure, pricing, proposed covenants, third party credit support and security. Why projects face difficulty Lessons from the past – review of a project that has faced financial difficulty Typical reasons for failure Options for equity investors in problem projects and practical problems Course summary and close