Project and Infrastructure Financing
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Project finance is the long term financing of infrastructure and industrial projects based upon the projected cash flows of the project rather than the balance sheets of the project sponsors.
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Learning Objectives - This module provides an instruction to the world of project financing. A typical project comprises of a network of contracts which cover execution in each phase of the project. The contracts are explained along with the key driver such that as an advisor one is aware of who does what and when?
Topics - The Contractual Network, Project Finance vs. Corporate Finance, Financial Contracts (Equity contribution agreement), Financial Contracts (Loan / Bond covenants), Industrial Contracts
Learning Objectives - This module introduces the use of bank syndication as a vehicle to fund most infrastructure projects. It establishes the roles and responsibilities of each bank in the syndicate and shows the split of fee between the mandated lead arranger vs. other banks. Finally it shows how the 2008 economic crisis changed the dynamics of this mode of financing.
Topic - Definition of a syndicate, Role of banks, Syndication strategies and how they are used, How much does the customer pay, The crisis and how it reshaped the market
Learning Objectives - This module covers the concept of project finance as a bulk of risk. A project is broken into two phases with each phase having typical risks associated with them. The contractual network helps definition of each phase. The outcome is a risk matrix which shows which party bears the risk and why?
Topics - Need for risk management, Mapping risk: Risk taxonomy, Pre completion risk: Technology and construction, Post completion risk: Supply risk, operational and performance risk, demand risk, Risks found in both phases, Risk matrix
Learning Objectives -This module shows the basic analysis of cash flows, construction phase and how this bulk of money will be financed, operational phase and how much cash will be generated.
Topics - Features of an infrastructure project, Setting up the construction phase budget, Financing construction: Equity contribution, base facility, VAT facility, stand by facility and working capital facility, Setting up the budget of the operational phase
Learning Objectives - Investors assess projects in terms of profitability which is measured through specific IRRs. Assessing creditor profitability along with financial stability is essential. The module covers measures like DSCR; point measures and LLCR; summary measures.
Topics - Profitability for shareholders, Profitability for creditors, From profitability to Financial stability, Cover Ratios and their calculation
Learning Objectives - This module describes composition of a security package; emphasizing the cash based nature of a deal. It explains covenants: positive, negative and financial along with materiality test. Finally it concludes with loan amortization and its tailoring.
Topics - Security package for project lenders, Covenants of Credit Agreement, Loan Amortization, Amortization methods and applicability