Background of the trainer:
The Trainer has over 40 years’ experience in banking, finance and financial training. He has had practical banking experience with major banks in the areas of corporate credit analysis, Corporate Banking Relationship Management and Commercial Real Estate Debt Finance. The trainer was subsequently involved in Commercial Real Estate Financial Advisory business with a then newly formed financial services subsidiary of one of the world’s largest Real Estate advisory firms.
The Trainer has almost 25 years’ financial training experience in about 60 countries focused on large scale Corporate Credit Analysis, Corporate Banking and Structured Debt Finance (Project, Infrastructure and Real Estate Finance). He holds an MSc Real Estate Investment and Finance degree from the University of Reading (2014).
The trainer has worked with participants in a wide range of job functions and experience from Commercial and Investment Banks, Development Finance Institutions, Export Credit Agencies, Public Sector organisations and large corporates.
Infrastructure Project Finance Course Overview:
In today’s volatile markets there is a renewed appreciation of the relatively stable long term cash flows from infrastructure investments. An increasing part of such infrastructure is by necessity being financed on a project – or limited recourse – basis.
Project Finance enables companies to raise focused, risk sharing, finance in key industries and is an increasingly important method for governments to introduce private sector skills, disciplines and funding in a range of sectors.
This programme will provide participants with an intensive overview of the following key elements of an Infrastructure Project Finance:
Business risk analysis training
- Review of fundamentals and key drivers of project viability, motivations of the parties involved in an Infrastructure Project Finance and their approach.
- Overview of key risks and risk allocation
- Principal options for governments in financing infrastructure, including PPP
- Debt funding sources and structuring of Infrastructure Project Finance transactions ;
- Project Finance vs. other corporate funding options;
- Understanding the equity investors’ perspective – investment appraisal techniques and links to cost of capital
- Capital structuring issues – debt vs. equity and influencing factors
- Main commercial aspects of documentation and structuring alternatives;
- Covenants and credit ratios
This programme is designed for personnel working on large scale projects, with limited or no practical experience of Infrastructure Project Finance, working in organisations such as:
- Project developers and investors
- Investment banks
- Equipment suppliers
- Commercial Banks
- Development Finance Institutions
- Export Credit Agencies
- Infrastructure Funds
- Construction companies
- Accountancy firms
- Law firms
- Financial advisors
- Government and other Public Sector Agencies working on PPP and other large scale Infrastructure projects
Pre course questionnaire and training methodology
A pre course questionnaire will be sent to participants upon registration to help the Course Director deliver a training programme relevant to the participants’ needs.
During the training there will be one or two core case studies used. The focus of case studies and examples will be on typical areas of Infrastructure (such as Roads and Transport and Social Infrastructure (e.g. public sector hospitals and schools).
This course can be presented in-house via live webinar.
Participant existing pre – requisites
It has been assumed that participants will have limited or no practical experience of Infrastructure Project Finance. However, to obtain maximum benefit from this training participants should already be familiar with the core aspects of:
- Corporate financial analysis
- The principal banking and Capital Markets debt products
- Investment appraisal techniques ( e.g. IRR, NPV) and the fundamental principles of company valuation
- Banking documentation
Infrastructure Project Finance Course Content:
An overview of key issues in Project Finance
- Overview of activity in Project Finance
- Review of an Infrastructure Project Finance transaction to illustrate key aspects of the transaction and subsequent developments
- Project Finance vs. the financing of projects
- Principal options for government in financing infrastructure projects including PPP and PFI
- The Project Finance “route map” – an overview of the key issues in evaluating and structuring a Project Finance transaction
Exercise: review of background on a core case study to identify the motivations and objectives of the main parties to the project
Risk evaluation in Project Finance
- Key risks – construction, operating and financial
- Typical approaches to risk allocation and mitigation
- Overview of the approach to a credit analysis for power projects to illustrate key elements of a rating
- Lessons from the past – what can be learned from past transactions about the value of forecasts
Exercise: participants review background on a core case study project and prepare a summarised”risk assessment” based on the risks and mitigants in the project
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
- Interest , foreign exchange and commodity price management issues in Project Finance
- Potential use of credit enhancement
Exercise: review of a case study project to illustrate the debt financing
Financial yardsticks used by equity investors and the relationship of sponsors to the project company
- An overview of the main project investment appraisal techniques, and implications in terms of risk and return and capital structuring of Project Finance transactions
- Understanding the equity investor’s approach to achieving returns from the project company, including operating relationships with the project company, and cash extraction through re – financing
Mini exercise: calculation and comparison of investment returns from selected projects
Documentation and structuring issues in Project Finance
- Rationale and structure of loan documentation
- Key covenants
- Construction contracts and cost overrun guarantees – differing formats of construction contracts and mitigation of construction related risks
- Intercreditor issues, including senior vs. subordinated debt
- Third party credit support and security issues for debt financiers, including critical commercial issues in Concession agreements, offtake agreements, completion and cost overrun agreements, and shareholder agreements
Case study – Participants review an outline summarized Term Sheet for the capital structure, covenants, third party credit support and security for an assigned case study project
Project Financing and Management
The courses we offer can be grouped and booked in unison with a number of secondary and tertiary courses. We believe that expanding and refreshing knowledge is at the heart of the success of the corporate and financial industry.