Mastering Infrastructure and Project Finance

Delivered by internationally certified and recognized experts in LBS and the PPP domain of practice, this Seminar is designed to assist investment professionals and financial analysts to fully understand the practical techniques, skills, and spreadsheet models needed to analyse, structure, negotiate, and ultimately complete successful project-backed financings.

This seminar is delivered in four modules, over a four-day period, including a site visit. The first module deals with Understanding Fundamental Requirements of Limited-Recourse Project Financing. The second module deals with Financial Analysis Skills for Project Financing Spreadsheet Models. The third module deals with Analysing Changes to Key Project Financing Structures: Sensitivity Analyses and Credit Enhancement. The fourth module deals Case Studies of Infrastructure Project Financing Models: Illustrations of project financing models and investment analysis from different infrastructure sectors.

This is concluded with an action plan and a site visit to observe a real PPP project and interacting with the project manager on the linkage between a theoretical model and empirical reality on the ground.

Programme

Understanding Fundamental Requirements of Limited - Recourse Project Financing

• Review of fundamental rationale for project financing
• Key technical structures of limited-recourse project financing versus sovereign financing versus corporate financing
• Understanding the key trends and dynamics that have driven and shaped the global project financing market since 1990
• Understanding the role of financial analysis and project financing spreadsheet design and development within the project financing life-cycle
• The impact of the current global financial crisis on the requirements for projects financing analysis and spreadsheet development

Financial Analysis Skills for Project Financing Spreadsheet Models

• Understanding key practical characteristics of effective project analysis models: clarity, flexibility & robustness
• KIM STAKING – Distinguishing three key components of effective financial analysis models; inputs, data manipulations, and outputs
• Specifying the analytical needs of key project stakeholders: Users & tariff affordability; Investors & Return on Equity (ROE) and payback periods; Lenders and Debt Service Coverage Ratios (DSCRs); Governments and Value for Money (VfM) benefits; and other stakeholders (labour, local suppliers, etc.)
• Designing, labelling, and programming key financial model worksheets: The input and results worksheet, demand projections, capital investments, financing sources, income statement, revenue projection, depreciation schedules, debt schedules, cash flow statement, and balance sheet projections

Analysing Changes to Key Project Financing Structures: Sensitivity Analyses and Credit Enhancement

• Understanding and applying sensitivity and scenario analysis techniques
• Single-iteration variable analysis vs. multi-iteration Monte Carlo simulation analysis
• Analysing the results of investment sensitivity analysis: identifying the need for additional credit enhancements to establish "bankability"
• How to structure, model, and apply project financing credit enhancement techniques: capital enhancement techniques: capital contributions, minimum demand and off-take guarantees, reserve accounts, subordinated debt, additional sources of revenue, public equity, and other credit enhancements

Key Learning Outcomes

• Understanding the underlying principles and rationale for employing project finance in Infrastructure Projects
• Comparing the fundamental structures of limited-recourse project financing versus corporate and sovereign financing techniques for infrastructure
• Learning how to design, set-up, and effectively label spreadsheet models for infrastructure project financing
• Understanding how to structure financial statements within project financing models including Demand Projections, Capital Investments, Financing Sources, Income Statements, Depreciation Schedules, Debt Schedules, Cash Flow Statements, and Balance Sheet Projections
• Planning and designing sensitivity analysis on key project financing variables to assess project "bankability" under different conditions.
• Network with leading PPP policymakers, transaction advisors, PPP project managers and key stakeholders.
  
• Site Visit