Energy Project Finance (3 - 4 days)

Learning the techniques and elements of non-recourse financing of large-scale energy projects:

1. Principles of Non-recourse Finance

• Market of project finance;
• The difference between "project finance" and "financing projects";
• the principles of project finance;
• "good" and "difficult" projects for non-recourse finance.

 

2. Energy Products and Projects

• Commodities and their markets: oil, gas, coal, bio fuels,power;
• Candidates for project finance: power generation, liquid natural gas (LNG) terminals, transmission lines, pipelines, refineries, primary and secondary oil & gas exploration.

 

3. Business Models

• Revenues: production profiles, contract types, offtake agreements;
• Pricing: auctions, markets, fixed;
• Operational costs: fixed, variable, working capital.

 

4. Sources and Instruments of Finance

• Funding requirements over the lifecycle of projects;
• Classes of funding;
• Financing instruments: equity, loan, bond, commodity-based lending, leasing structures, guarantees, Islamic financing structures.
• Debt instruments: repayment methods, interest calculations, credit ratios.

 

5. Cash Flow Model

• Using a cash flow model to analyse and structure projects including sensitivity and scenario analysis;
• Debt sizing;
• Credit decision, investment decisions;
• Re-financing debt, secondary equity sale;

 

6. Risk Assessment & Strategy

• Identification of risks, including credit, market, interest, infrastructure, engineering, liquidity, supply, currency, political and environmental;
• Discussing structures to allocate, finance or mitigate risk and impact on financial model.

 

7. Contractual and Legal Framework

• Detailed discussion of crucial contracts including loan agreement, project implementation agreement, construction contract, o&m contract, power purchase agreement, corporate documentation, land agreements and bond documentation;
• Bankruptcy of debt or equity providers;
• Insurance;
• Anti-corruption and anti-money laundering.

 

8. Project Finance in Specific Energy Sectors

• Renewable energy project finance;
• Merchant power projects;
• Transmission lines;
• Nuclear power;
• Oil refineries;
• Biofuel production;
• Oil & gas exploration.