Structuring and negotiation of financial, operational and legal risks.
Learn the process of structuring a project finance transaction and get invaluable tools for professional project financiers
- Get insight into the differing objectives and risks of key parties
- Undertake risk analysis of projects in mining, power, PPP infrastructure and oil & gas
- Key sources of funding including Export Credit Agencies / Multilaterals
- Analysis of key legal risks in projects
- Efficient management of currency, interest rate and commodity price risks
- A structured approach to Due Diligence and analysis
- Detailed examination of failed projects and lessons learnt
- Real life project finance case studies
How will this course help you and your team?
- Work actively in all phases of a project – origination, execution and monitoring
- Gain more structure in the Due Diligence process
- Achieve stronger structuring and negotiation skills
- International case studies improves benchmarking and references
International project finance
Entering or working in the ever changing world of project finance requires continuous learning. This challenging field attracts the brightest minds of finance to create complex structures with implications on legal, operational and financial risks. No other field attracts such a wide mix of backgrounds from Lawyers, Actuaries and Credit analysts, Engineers and Economists. To get to the top it is crucial to have a detailed knowledge of all building blocks of a project finance transaction from the different perspectives of stakeholders and environments.
Structuring of a transaction
Many project finance professionals started out as financial modellers to achieve financial confidence with a project. Stepping up to get active in the structuring and negotiations requires further knowledge which is where this course fits in perfectly. The course covers the essential and advanced skills required in legal, financial instruments, operational issues, cross-border, Due Diligence, sources of funding and other key areas.
Updated transaction case studies
The course is based on a case studies, lectures, group and individual exercises. The case studies are based on Mr. MacDonald’s successful project finance career with ANZ Investment Bank and the Royal Bank of Scotland and includes references to recent real projects from 2005-2008.
- Mining greenfield project in Australia
- Power greenfield project in Indonesia
- PPP infrastructure in Singapore
- Oil & gas borrowing base facility in Australia
Is this course right for you?
This course has been specifically designed for professionals with backgrounds in the following areas.
- Project Developers
- Financial Advisors
- Banking teams
- Government and Export Credit Agencies
- Construction and Service Companies
- Legal and Accounting Firms
- Geologists, Engineers and sector specialists
- Project Consultants
Not only will you learn from one of the most talented Project Financiers in the market but you will meet like minded people, take away a new set of skills and gain a strong appreciation of the tools and techniques being applied in the project finance market today.
Day one
Essentials of a project finance transaction
- Analysis of commercial drivers
- Traditional industries and newly emerging subsectors
- Domestic and international financing
Parties involved in different phases of a project
- Sponsor(s), EPC contractor, offtaker(s)
- Operator and mining contractor
- Financiers and Export Credit Agencies / Multilaterals
- Lease Providers
Stages in the structuring and execution processes
- Negotiation and the lead up to and challenges of Financial Close
- The different phases of Construction, Completion and Operations
- Refinancing and ultimate closure
Sources of funding with different risk profiles
- Sponsor and third party equity
- Bank market (senior and subordinated debt)
- Capital markets (Bonds, securitisation)
- Export Credit Agencies (ECA) / The World Bank and key Multilaterals
The role of investors
- JV Partners for Sponsors
- Export Credit Agencies / Multilaterals
- Structuring Project Finance transactions for distribution
- The syndication process
Characteristics of financing structures in different sectors
- Power, Infrastructure and PPPs
- Mining, Oil & Gas and Telecoms
The Role of Due Diligence in Project Finance Transactions
- Technical and Market Due Diligence
- Financial Model and Model Audit
- Environmental & Social, including the Equator Principles
- Marketing and Insurance
- Legal and Tax & Accounting
Day 2
Legal framework required to achieve Financial Close
- Contractual obligations amongst Key Parties
- Shareholder / sponsor documents
- Project and finance Documents
Financial modelling of base case and downside scenarios
- The financial model and the role of assumptions
- Relationship between the key variables and ratios
- Nominal vs. real calculations
- Types of financial ratios (IRR, NPV, DSCR, LLCR, PLCR)
- Sensitivity and cashflow waterfall analysis
- The model audit – involved parties and process
Risk structuring and analysis
- Country and political
- Sponsor and management
- Construction, operational, market
- Financial, environmental, social
- Insurance, legal, tax
- Force majeure
- Acceptable risks – the risk allocation matrix
Structuring of the financial arrangements
- Debt sizing and debt facilities
- Credit enhancement
- Financial: Interest rates, FX, commodity price
- Repayment method and reserve accounts
- Prepayment and cash sweep
- Capex and major maintenance expenditure
Day 3
Credit analysis skills in a banking environment
- Approach to analysing risk
- Presentation of risks and mitigants
- Presenting to senior management or credit committees
What to do when things don’t go to plan
- Lessons from the past
- Reasons for failure
- Dealing with an underperforming loan
Ongoing Monitoring of live projects
- Covenants
- Role of consultants
- Project Completion
- Site Visits
- Sponsor’s Perspective
The future of project finance
- Current trends
- Where project finance may go in the future
The case studies – essential in explaining key concepts
- Sponsors present their equity case to a panel representing the board of directors
- Lenders present their case for lending to a panel representing the bank’s credit committee
- Export Credit Agency presents their case to a panel representing their board.
Continued emphasis
- ‘Hands on’ learning - interactive case study focused sessions
- 4 x updated industry case studies
- Plenty of opportunities for Q&A built into the program
- Group exercises – learn from other participants
Neil MacDonald – project finance expert
Neil MacDonald is a project finance expert with a strong track record in originating, executing and distributing project & export finance transactions.
Neil has extensive experience in origination and executing project finance transactions in infrastructure, mining, power, water, rail, PPP and oil & gas. His career includes working for ANZ Investment Bank and the Royal Bank of Scotland in London and Sydney.
Neil has worked with the major export credit agencies including EFIC, Euler Hermes, Coface and US Ex-Im on projects in Australia, Colombia, Indonesia, the Middle East, New Zealand, the Philippines, Papua New Guinea, South Africa, Tanzania, the United Kingdom and the United States. This comprehensive international exposure makes him a perfect training for International Project Finance.
Recent Career Highlights
- 2008 Petrochemical plant in Singapore (USD 1.4BN)
- 2007 Oil & gas project in Australia (USD 270m) - Coogee Resources
- 2006 Iron ore project in Australia (USD 350m)
- 2005 Merchant power project in Australia (AUD 2.33BN) – Loy Yang A
- 2004 Coal seam gas project in Australia (AUD150m) – Comet Ridge
- 2003 Gold mine in the Philippines (USD35m) – Rapu Rapu
- 2003 Oil & gas financing in Papua New Guinea – Oil Search Limited
- 2003 Contracted power project in Australia (AUD189m) – Townsville Power Station
- 2002 Underground coal mine in Australia (AUD76m) – Tahmoor North Coal Project
- 2001 Oil rig financing in Indonesia (AUD54m) –Australian Oil & Gas Co
- 2000 Gold mine in Tanzania (USD200m) –Barrick Gold
- 2000 Nickel project in Colombia (USD200m) – Cerro Matoso, Billiton
Case Study: Mining
- Greenfield project
- Aluminium refinery & smelter
- Australia
Case Study: Power
- Greenfield project
- Independent power producer
- Indonesia
Case Study: Public Private Partnerships
- Greenfield project
- Social infrastructure
- Singapore
Case Study: Oil & Gas
- Borrowing base facility
- Junior oil & gas producer
- Australia
