Project Finance - Introduction
Cost for BPP PD Members: £1470 + VAT 18 CPD Hours
(£1845.00 + VAT for non BPP PD Members Click Here for details of our membership scheme).
This course will be of benefit to those working within, or intending to move into, project development or project finance areas. Previous participants have included engineers, bankers, accountants, lawyers and middle/senior managers in utility companies, commercial banks, consultancy and law firms.
This intensive three day course aims to provide an overall view of the concepts and approach used in structuring and arranging project finance transactions for major infrastructure schemes in the UK and overseas. The course takes participants through risk analysis and risk management techniques, develops a project appraisal methodology, demystifies the language and approach of financiers and transfers an understanding of the drivers, approaches and concerns of the key players involved in creating and financing major projects. A special focus will be on finance and the tools to value a project. The course will be interactive and will include many exercises and case studies. No prior knowledge of project finance or finance is assumed.
Learning outcomes include obtaining a greater understanding of:
Introduction and overview of Project Finance
Project Finance Market
- Definition of Project Finance
- ’Project Finance’ as opposed to ‘Financing of a project’
- Limited recourse and non-recourse finance
- Main features of Project Finance
- Parties involved – interests and roles
- Importance of cash flow
- Documentation – what are the aims?
- Project development process
- Why choose Project Finance?
The main parties in Project Finance
- Origin and evolution of Project Finance
- Project Finance figures: Europe, Americas, Asia & Pacific, Africa & Middle East
- Oil & gas, Power, Infrastructure, Mining, Telecom
Risks & Mitigants
- Parties involved – interests & roles
- Project company/borrower
- Multilateral & export credit agencies
- Construction companies
- Host government
Credit Analysis by the Lenders
- Understanding the risk allocation
- Country & political risks
- Environment risks
- Construction risks
- Offtake-sales & supply risks
- Contractor risks
- Operator risks
- Funding risks
- Foreign Exchange – currency & interest rate risks
The Financial Statements
- How do lenders assess projects?
- Assessing credit worthiness
- Getting started with Credit
- Business/Commercial Risk
- Risk evaluation framework – developing a methodology
- Industry Products/market suppliers / contracted purchases
- Project Production facilities/infrastructure/Technical/contractors
- Management – Project’s Sponsors
Advanced Cash Flow Analysis
- Balance Sheet & Leverage
- Income Statement & Cash Flow
- Ratios Ratings
Structuring a Project Finance
- Net Operating Cash Flow
- Free Cash Flow
- Discounted Cash Flow
- Cash Flow Analysis
- What do we want from a model?
- Repayment profiles and coverage ratios
- Key management concerns with models
- Key Project Finance Ratios: Sponsor’s Perspective
- Investors – gearing benefits
- IRR – The Internal Rate of Return
- NPV – The Net Present Value
- Key Project Finance Ratios: Lender’s Perspective
- CADS – Cash Flow Available for Debt Service
- DSCR – Debt Service Cover Ratios
- PLCR – LLCR – Project and Loan Life Cover Ratios
- Why are the financial models used?
- What is the project and why should it take place?
- What are the key operating assumtions?
- The Financial Modelling Assumptions:
- Construction Cost
- Operation: revenue, expenses, taxes
- Financing: Debt/Equity
- Cash Flow: CADS-DSCR / NPV-IRR
- The Projection Cases
- Appropriate Debt & Equity Financing
- Shareholder/sponsor arrangements
- Project Documents
- Legal & structuring issues
- Seniority, Senior Debt, Junior Debt, Equity
- Cash Flow Waterfall
- Loan Documentation
"A CPD certificate of completion will be provided by BPP Professional Education Limited upon request, following attendance."
||10 - 12 Oct 2018
||9:00 AM - 5:00 PM