Essentials of Project and Infrastructure FinanceThis is a practical course that provides executives, whether as financiers, sponsors, or professional support, an opportunity to understand the risk-return character of limited recourse projects from multiple perspectives. Case studies span a variety of sectors and geographical regions. This course will not use in-depth models involving Excel™, but the instructor will review modeling approaches with examples. |
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| Financiers involved in developing opportunities in project finance. Investment banking, commercial banking, private equity, private placement and hedge fund personnel dealing with financial analysis or documentation of transactions. Engineering and treasury staff at infrastructure, construction or equipment supply companies. Staff at utilities and extractive industry companies. Government officials involved in procurement and negotiations with private sector infrastructure providers. Lawyers involved in documenting limited recourse transactions. Rating agency analysts reviewing project finance and infrastructure debt. Consultants and advisors providing support for proposed transactions. Underwriters and analyst at Export Credit Agencies. Officers at multilateral lenders. |
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| No advance preparation required. |
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Students will be able to:- Articulate what project financing is
- Define the roles and objectives of the various participants
- Assess the risks of the transaction from different viewpoints
- Recite numerous examples and apply them to everyday
- Know the basic term sheets, structures and legal documentation
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| Knowledge of corporate finance and basic credit analysis. |
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DAY ONEAm: Macro-Level Concepts- Definition of project finance
- The corporation vs. non-recourse debt analysis
- Participants and motivation
- History and evolution of project finance
- Iron ore mine and pipeline examples
- Basic project finance structure (Greenfield, privatization, expansion)
- The important of accounting conventions (take or pay throughout, keep well, consolidation) in project finance
PM: Description and examples- Descriptive types of projects (including projects in the U.S., Europe and emerging markets)
- Examples over time
- How did projects employ the basic principles
- Lender checklist for a typical financing and what sponsors need to know about lenders
- Compare a U.S. case study to the checklist
| DAY TWOAM: The project finance process- Beginning of project finance
- Typical time line (6 months to several years)
- Feasibility study and financial modeling
- Roles of the various players
- Risk sharing among the players; how much risk will the lenders accept
- Joint and several, offshore escrow, operating leases, sponsor limits
- Heding of risks
PM: Reviewing multiple examples- Considering the risks, benefits, structures and economics of multiple projects
- International airport
- International gas to power
- Toll road
- Water to power
- Mining project
|  | DAY THREEAM: Documentation, rating agencies, loan syndication- Project documentation for a new (or ''Greenfield'') project
- Project documentation for an existing (''Operating'') project
- An outline of the many contracts involved
- The legal puzzle: fitting the contracts together
- Rating agencies' critical role
- Loan syndication (process and issues)
- Considerations for the default scenario
PM: Examples, case study and risks- Emerging market Greenfield project
- Case study
- Term sheet example (30 pages plus)
- Project benefits from the viewpoint of the various players
- Political and currency risk
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| Clients who register for this course will receive a complimentary 4-month subscription to FT.com. The Financial Times is the world's most respected financial newspaper, providing a broad assessment on finance, business and the industrial sector. The move to the electronic version follows an ongoing review of our environmental responsibilities as a global business and as part of the Pearson group. FT.com also has features that are not available in hard copy, such as: Special Reports, Alphaville, editor blogs, education sections and much more! Subscriptions will start within 6-8 weeks of the start of class and are limited to one subscription per client. (Please note: as of May 1, 2011, the electronic subscription replaces the hard-copy 3-month Financial Times subscription.) |
Lunch is included for all students taking day classes. |
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