IFF Training

The Mechanics of Project Finance (Online)

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About the course

This is a very practical course – designed by a practitioner for practitioners in the project finance sector. The modules and case studies included in the course add up to a manual, not a textbook. The aim of the programme is to provide those who follow it with a project finance ‘toolkit’. This approach assumes little or no pre-existing knowledge and experience and builds from the most basic level into a set of skills and techniques which will allow you to assess the bankability of projects from a very wide range of sectors. Rich in ‘tips and tricks’ and practical checklists, it provides beginners in this field a comprehensive mental framework for the analysis of projects and the structuring of limited-recourse debt. Students with some previous experience will find that it codifies what they have already learned and allows them to consolidate their skills and fill in gaps in their knowledge.

The course takes place over 16 weeks and consists of eight distance learning units. Every two weeks an additional unit will be released with the associated assessment so you can confirm your understanding before moving on to the next unit. Each unit is complemented by a 10-20 minute video from the course director, Steve Mills, taking you through the components of the course with particular emphasis on complex areas.

The six core modules cover the basics of project finance, risk analysis and allocation/mitigation, debt sizing and structuring and documentation. Students then elect to pursue a specialist path – Power /Oil and Gas or Infrastructure/PPPs – and follow a two-module programme providing a ‘deeper dive’ into the specifics of project finance in these sectors. Studying this programme also offers you the option of qualifying for a Postgraduate Certificate from the respected Middlesex University. This is the only project finance course that offers the chance to achieve this qualification.

HOW YOU WILL LEARN

Through distance learning you can enjoy the benefits of studying whilst minimising disruption to your existing professional commitments. You can set the pace at which you learn; applying the knowledge, skills and expertise gained from the materials to your work straight away. There’s also the savings of cost and time by not having to travel to a training location.

You can choose one of two learning routes: the university-accredited route and the standard non-accredited route.

Approaching the topics in a modular format, the course will enable you to grasp the key concepts in a practical way and thus help you build a firm platform on which to expand your knowledge.

The course will take you step-by-step through the different components of Project Finance. You can study the units online, save them to your computer or print them out. You can also take advantage of the online forum to meet your fellow participants and share knowledge, ideas and information at any time.

At the end of each unit there is a practical assessment which will allow you to benchmark your growth in knowledge and understanding and show you clearly the tangible benefits of the investment you are making.

Syllabus Modules

Unit 1 - An Introduction to Project Finance

This module will introduce the meaning of Project Finance, the reasons for its use, the risk/reward relationship and the impact of the credit crisis on project financing.

Unit 2 - Qualitative Risk Identification Analysis & Mitigation (part A)

Explain the key qualitative risk factors analysed by lenders when evaluating a project financing – in this unit particularly sponsor risk, country/political risk, completion period issues and operation & maintenance arrangements. It will also explore how these risk factors are perceived by bankers, mitigated and (where necessary) allocated to other parties within or outside the project structure.

Unit 3 - Qualitative Risk Identification Analysis & Mitigation (part B)

Explain the key qualitative risk factors analysed by lenders when evaluating a project financing – in this unit particularly supply risk, reserve risk, sales /offtake arrangements, approvals / permits issues, environmental factors and regulatory considerations. Explore how these risk factors are perceived, mitigated and (where necessary) allocated to other parties within or outside the project structure.

Unit 4 - Quantitative Analysis, Debt Sizing & Structuring

Examine how an economic model of the project’s projected cash flow is employed to structure the drawing and repayment of debt, the use of “Cover Ratios” to size debt, structure the repayment of the financing, test the debt-servicing capacity of the project in downside scenarios and provide “command and control” mechanisms during the life of the financing. It will also analyse the impact of the debt structure on the IRR of the sponsor and how the lender’s need for debt servicing security is balanced with the objectives of the sponsor.

Unit 5 - Documenting the Deal

Explain the process of documenting a project financing transaction and the components of the major documents with particular reference to the loan agreement itself. Analyse the purpose and structure of the key parts of a project loan agreement – especially the control mechanisms incorporated to protect lenders in periods of weak cash flow or at the point of default.

Unit 6 - Project Finance Time-Line & Project Finance Security

Explain in detail the process of negotiating and documenting a limited-recourse financing and the way in which the steps (and their duration) have been impacted by the Credit Crisis. Provide a clear appreciation of the different instruments typically used by lenders to acquire a first-ranking security interest in respect of the project vehicle company, fixed and current assets, project contracts and other rights.

Elective Unit 1 – Path A

  1. Infrastructure Project Finance

Understand in detail the qualitative risk analysis and debt structuring features peculiar to infrastructure project finance.

  1. PPP/PFI Project Finance

Learn in detail the qualitative risk analysis and debt structuring features peculiar to PPP/PFI project finance, the drivers for the establishment of the sector and the key documents which underlie PPP/PFI projects – particularly the concession.

Elective Unit 2 – Path B

  1. Oil & Gas/Mining Project Finance

Cover the particular challenges faced by lenders providing limited-recourse finance to projects in the extractive industries. Gain a clear understanding of the variations in financing structure and practice seen in key sub-sectors.

  1. Conventional & Renewable Power Project Finance

Set out in detail the qualitative risk analysis and debt structuring features peculiar to power project finance, the impact of the power sales arrangements on debt capacity and structure and the differences between conventional (gas and coal-fired) projects and those involving renewable energy sources.

Who should attend

This course is ideal for people who are new to project finance or those who have already some experience in the sector.

It will be of particular benefit to staff in: business development, portfolio management, credit function, energy, mining, infrastructure, PFI/PPP, legal professionals, accountants, insurance brokers and advisors, ECA and multilateral agency staff.

Trust the experts

Steve Mills

Steve Mills is a well-known figure in oil and gas finance. Until he decided to devote himself to training, development work and writing in the area of project finance, he was Head of Oil and Gas Project Finance for Royal Bank of Scotland in the City of London. Steve is a career project finance b...

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The Mechanics of Project Finance Training Course introduced by Jeff Hearn

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