Fundamentals of Project Finance Course

Course Overview:

The Fundamentals of Project Financing course is aimed at imparting deep comprehension of techniques of project financing, specific terms, and risk management.

At the end of the course, participants are prepared to explain, for what purposes sponsors employ project financing, how does the lender perceive risk, and what elements are taken into account when designing the structure of the project, which is supposed to provide the required amount of equity in relation to debt.

These include issues surrounding the project finance framework, its critical components such as risk factors like completion and operational risks, characteristics, and types of debts and sources of finance like bonds and export credit agencies.

The course will also come in handy to a large number of specialists in different areas, including but not limited to bankers, finance advisors, project developers, government bodies, and insurance brokers, as it equips them with relevant skills and knowledge for effective management of complicated project finance and investment decisions.

Course Objectives:

At the end of this This Fundamentals of Project Finance training course you will able to:

• Analyze why and when sponsors use project financing techniques
• Widen your understanding of the project finance techniques and the jargon used
• Examine the key sources of limited-recourse debt
• Appreciate the lender’s approach to risk
• Understand how key risk factors drive structure and loan pricing Learn how project models are built and used to balance equity against debt
• Appreciate how project models are used to optimize debt amounts, maturity, and re-payment

Who Should Attend?

The Fundamentals of Project Finance Courses will be valuable to professionals in the following areas:

• Bankers/Investment Bankers
• Project Finance Modelers
• Financial Advisors
• Sponsors/Project Joint Ventures
• Project Developers
• Government/PPP Agencies
• Public Sector Managers
• Export Credit Agencies
• Multilateral Agencies
• Accountants/Taxation Advisers
• Financial Analysts
• Share market Analysts/Brokers
• M&A/Buyout Specialists
• Privatization Executives
• Company Treasurers/Directors
• Credit Committee Staff
• Rating Agencies
• Project Managers/Engineers
• Project Consultants
• Investment/Portfolio Managers
• Insurance Advisers/Brokers

Course Outlines:

What is Project Finance?

• Definition – “Project Finance” as opposed to financing of a project
• Limited-recourse and non-recourse finance
• Origins of project finance
• Who uses project finance and why?
• What is the downside?

The Project Finance Process

• The Players and their interests
• Ownership structures
• Key project contracts
• Role of advisers:
• The financial feasibility study/debt structuring
• The information memorandum
• Debt underwriting/syndication
• Financial close
• Post-close monitoring

Sponsors and Lenders/ The Lender’s Risk Analysis

• Different risk/reward objectives of sponsors and lenders
• Balancing equity and debt
• Different types of debt – senior/ subordinated/mezzanine
• Structural & pricing drivers
• Key ratios – annual debt service, loan life, and project life covers
• Balancing equity and debt
• Assessing the Risks
• Macro risks
• Completion risk
• Operational risk

Other Sources of Debt Finance / Risk Mitigation

• The bond markets
• Credit enhancement through guarantees
• Islamic finance
• Private political risk insurance market
• Export credit agencies
• Multilateral agencies/development banks
• Sponsor co-financing

Project Financing Documentation

• The term sheet – purpose, legal status, binding/non-binding aspects
• Term-sheet/documentation provisions:
• Term-sheet interactive exercise
• Legal opinions
• LMA standard terms
• Security and credit rights
• Payment waterfall
• Collateral and assignment of contract rights
• Rights of the controlling classes, inter-creditor issues
• Reserve accounts, cash sweeps, profit distribution controls
• Refinancing risk
• Project types
• Conclusion

see more: IFRS 9 Financial Instruments Course