Day One

Session 1

An overview of key issues in Project Finance

• Project Finance vs. the financing of projects

• The Project Finance “route map” - an overview of the key issues in evaluating and structuring a Project Finance transaction

• Motivations for using Project Finance – parties involved and their objectives

• An overview of a Project Finance transaction to illustrate key aspects of the transaction

Session 2

Risk evaluation in Project Finance

• Key risks – construction, operating and financial

• Typical approaches to risk allocation

• Due diligence process – assessing viability of the proposed project development plan, market and cost assumptions

Session 3

The project financial statements and review of key assumptions

• Key elements in the structure of Project Finance spread sheets

• Review and sensitivity of a generic Project Finance spread sheet to identify potential key influences on project viability

• Lessons from the past – what can be learned from past transactions about the value of forecasts and feasibility studies

Day Two

Session 4

Sources of debt financing in projects and debt capacity

• Rationale for Project Finance vs. other debt financing techniques

• Export Credit Agencies and Development Banks; bank debt vs. bonds; senior vs. subordinated debt

• Interest and foreign exchange management issues in Project Finance

• Using projected cash flows as a basis for assessing debt servicing capacity

• Impact of the credit crisis on terms of debt finance

Session 5

How equity investors assess projects - financial yardsticks used by investors

• An overview of the main project investment appraisal techniques

• A brief review of the principles for calculating corporate cost of capital and use as a basis for evaluating project returns

• Understanding equity investors’ approach to achieving returns from the project company, including operating relationships with the project company, and cash extraction through re – financing

Session 6

Documentation and structuring issues in Project Finance

• Structure of loan documentation and key financial covenants

• Intensive overview of the key aspects of Project Finance documentation and key commercial considerations in documents such as construction contracts, off take agreements, supply agreements, third party guarantees and completion and cost overrun guarantees study - Structuring third party credit support and security: Participants produce an outline proposal for the capital structure

Course Close