Course Overview

This course covers the key steps in identifying the critical components of a project and assessing the associated risk.
It includes a thorough review of the roles of the different parties in the transaction (the sponsor, the company, the commercial lenders, technical experts and lawyers), an examination of the four different phases of the deal and emphasises especially the risk aspects.
The methodology behind the construction of the cashflows and the techniques deployed in their evaluation are taught comprehensively with exercises. The structure of the transaction is also addressed, as are the legal and documentation aspects.
The essential due diligence procedures are also reviewed.

The seminar includes several major case studies and also deals with international aspects.

Course Content

 Project Finance Overview
Contrast with other forms of limited recourse financing
The rationale for using project finance and trends

 Project Finance - the Parties

 Stages in the Deal
Stage 1: The Feasibility Study
Stage 2: Planning
Stage 3: Arranging and Structuring the Finance
Stage 4: Monitoring the Financing

 Ownership Structures
Considerations in selecting a structure
Project finance structures
Special purpose vehicle ("SPV")
General and limited partnerships
Joint ventures ("JVs")

 Sources of Funding
Types of equity and debt
Methods of obtaining finance
Structure of capital markets
International issues
Bond issues and securitisation

 Project Finance Risks
Classification and identification of risks
Risk matrices
The role of due diligence
Risk allocation and mitigation

 The Lender's Perspective
Key figures in the financial projections
Ratio analysis and limitations
Financial, covenant and country risk ratios

 The Sponsor's Perspective
Methods of evaluating investment decisions
Factors influencing the cashflows
The cost of capital - choice of discount rate

 Credit Enhancement and Security

 Types of Project Contracts and Documentation