Project Finance Masterclass

22-26 August 2011, Hong Kong

Advanced Project Finance Workshop

22-24 August 2011, Hong Kong

Module 1:

Analyse risk characteristics and implement risk-allocation structures Evaluate the key financial sensitivities of a project and identify the main quantitative and qualitative measures Develop due-diligence tricks and avoid traps Discuss important issues such as documentation and major financing agreements in project contracts Through hands-on case study teamwork, determine suitable structures and metrics Understand the valuable counter-cyclical aspect of project finance in the light of the current financial crisis

Energy Project Finance

25-26 August 2011, Hong Kong

Module 2:

Intense review of 29 case studies will highlight every aspect of the energy project-finance business Learn the technical aspects of energy cashflows What are the best credit measures to use for energy transactions and why? Enhance and integrate your energy sector skills Determine the appetite for which different funding sources in the energy project-finance space Examine the trends in the energy project-finance business post global financial crisis

Course Director:
Pioneer in major project finance applications and global expert on risk allocation techniques

Richard Tinsley

Secure your place! Register before 25 July 2011. www.euromoneytraining.com/asia

WHO SHOULD ATTEND? Bankers / investment bankers Financial advisors Sponsors / project joint venturers Business 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 Privatisation executives Company treasurers / finance directors Credit committee staff Rating agencies Project managers / engineers Project consultants Investment / portfolio managers Insurance advisers / brokers

Euromoney Training presents the Project Finance Masterclass, combining two modules, Advanced Project Finance Workshop and Energy Project Finance in Hong Kong in August 2011. This Masterclass is intended for those who have an interest in risk management/structuring aspects of Project Finance with the second module dedicated to case-study review of the Number One sector in the Project Finance business. Thus, these two modules have been developed to complement each other in content so that on completion of both modules, delegates will have a complete understanding of and feel confident in a range of Project Finance situations in the context, always, of World Best Practice. For the Advanced Project Finance Workshop, team casework is supplemented by precourse reading and an Excel model (for each case). For the Energy Project Finance module, the technical aspects of each part of these industries will also be drawn in the context of the impact on cashflow generation for the respective project(s). This will range from power generation, transmission, and distribution, to upstream and midstream fuels, as well as solid fuels and renewables. Due diligence and financial analysis aspects will be delivered in depth for both modules. Delegates should be comfortable with financial measures such as discounting and the Debt Service Coverage Ratio calculations and should have some knowledge of business law and the project development process/timeline. Pick the module that best suits your needs or, better, attend the full Project Finance Masterclass (both modules) and save US$2,150.

VENUE All of our courses are held in 4 5 star hotels, chosen for their location, facilities and level of service. You can be assured of a comfortable, convenient learning environment throughout the duration of the course. Due to the variation in delegate numbers, we will send confirmation of the venue to you approximately 2 weeks before the start of the course. ABOUT US Euromoney Training courses are designed for ambitious professionals who wish to gain practical skills based knowledge. With offices located in Asia, Europe and the USA and as part of the global media group, Euromoney Institutional Investor PLC, we are in the perfect position to provide you with relevant, up-to-date and international expertise. With an extensive range of financial, legal and audit training courses we have met the training needs of over 40,000 market professionals globally. Our courses are held on a public or in-house basis, a full list of which can be found on our website. Visit www. euromoneytraining.com/asia. CONTINUING PROFESSIONAL DEVELOPMENT Although Euromoney Training cannot warrant that the attendance of this programme would automatically be recognised by your countrys Securities and Futures Commission, it is highly likely that Euromoney Training courses can fulfil CPT requirements as they maintain and enhance delegates technical knowledge and professional expertise. Please check directly with your employer as the corporate licensee of your SFC registration, who is responsible for determining whether a training course satisfies CPT requirements.

The best course Ive ever attended, 10/10!

Past delegate, Commercial International Bank

Secure your place! Register before 25 July 2011.

Email

training@euromoneyasia.com

+852 2520 1481

Telephone

Facsimile

+852 2866 7340

Module 1: Advanced Project Finance Workshop

22-24 Agust 2011, Hong Kong

in project finance

Day 1: Hot buttons

Registration commences at 8:30 Programme runs from 9:00 - 5:00 daily

documentation
Credit criteria
Case study: credit analysis Impact of leverage Calculations for global coverage ratios Calculate liquidated damages / overrun / retention requirements

Day 2: Funding and

Funding sources
Offtake / sales contracts Support agreements / direct agreements Indirect supports / comfort letters Government guarantees / PPP architecture

Best sectors and project types

Difficult sectors to avoid Which trends are current?

Why choose project finance vs. balance-sheet finance?

Sponsors rationale Lenders criteria Constructors objectives Governments role(s) Institutions / investors

Credit factors
How to choose sensitivities Key ratio targets Contrast to sponsors IRR, NPV, valuation analyses

How to determine the correct structure for each risk?

The 7 risk systems The 16 risks to identify The 81 structures to apply

Debt Local currency Cross-border Mezzanine Credit wraps Monolines? Equity Preference capital Convertibles IPOs / floats for projects Capital markets Leasing / Leveraged leasing Export-credit agencies Multi-lateral agencies Commodity-based Offtake contracts Derivatives

Funding documentation
Loan agreements Joint venture / shareholder agreement Security documentation Assignment of contracts / insurances Offshore proceeds account Swaps Securitisation Information memorandum

Stages in project finance

Time, team, costs Credit approval / information memorandum Syndication

Ratings for project financings

Due diligence
How to scope the review Independence of the reviewer Fit to credit approval / compliance The Bankable feasibility study

Case study / modelling assignments Tollway banks / bond 144A power project Oil & gas political risk Infrastructure project

Operating: Cost, technical, management Completion / construction Political Infrastructure Market / revenues Environmental Inputs / reserve Sponsor / participant Force majeure Foreign exchange Engineering / design Syndication Interest / funding Legal

How to get one from Moodys / Standard & Poors / Fitch

Contractual architecture
PPP architecture including Concession Agreements / BOO / BOOT Special purpose vehicles (the 6 types) Operations / Management (O&M) contracts Turnkey construction contract Delayed completion and systems performance insurances

Role of the advisor(s)

When to involve advisors How to keep the costs down

Copyright Euromoney Training 2011

Course director

Richard Tinsley
Pioneer in major project finance applications and global expert on risk allocation techniques

Finance. IAF is a network of firms in the infrastructure, energy, and resources finance sectors in New York, Boston, California, Mumbai, Johannesburg, Melbourne, and London. In the finance field, Richard has been Project-Finance director at Continental Bank (Chicago); European Banking Company (London); Prudential-Bache Capital Funding (Wall St.), and Indosuez Australia (Sydney, Australia now Calyon). As a professional independent director, he serves as an adviser to infrastructure, energy, resources, telecoms, and water utilities companies worldwide. Richard Tinsley has

Richard Tinsley is a banker/engineer/economist with over 30 years experience, mostly as a strategic/financial advisor or as the lead banker on numerous transactions totalling US$14.8 billion at last count in 35 countries but also as CEO and CFO of a project development and operating company. (He issued one of the first true Project-Finance bonds.) He has worked in five countries: Ireland, Canada, USA, UK, and now Australia. Richard is President of International Advisory &

Find out more or register your place today!

www.euromoneytraining.com/asia
Web

Module 2: Energy Project Fi

25-26 August 2011, Hong Kong

risk and case presentations

Day 3: Political
Political risk structuring

Day 4
Registration commences at 8:30 Programme runs from 9:00 - 5:00 daily

Definitions Terrorist questionnaire The classic three: expropriation; war; inconvertibility The full set of 21 political-risk categories Export-credit agencies / bilateral agencies KfW-Ipex ECGD, UK EDC, Canada JBIC/NEXI, Japan US Eximbank OPIC, USA EFIC, Australia SACE, Italy Tactics for approaching the ECAs Multilateral agencies World Bank Multilateral Investment Guarantee Agency (MIGA) International Finance Corp (IFC) European Bank for Reconstruction & Development (EBRD) Asian Development Bank (ADB) How to approach the multilaterals?

Case study presentations: each team presents its allocated case with structures and solutions as well as cashflow sensitivities. Expert feedback on the teams presentation of the deal architecture, risks, and financial sensitivities.

Project finance rationale

Characteristics and limitations Advantages and disadvantages What to consider in the project process

Sinan Solar, South Korea (Power) This is the worlds largest photovoltaic (PV) project financing. Comparison to other solar technologies/ financings. Inner Mongolia (Wind) This 50MW wind farm was structured as a purely localcurrency financing via a Chinese bank and Asian Development Bank (ADB). Tata Mundra, India (Power) This landmark Indian deal (Ultra-Mega Power Plant UMPP) paves the way for other combination funding approaches. How could a coalfired power plant claim carbon credits? What is the link to imported coal? Ranger Uranium, Australia (Mine) Examine the most aggressive environmental project financing via a rehabilitation guarantee to the government (and why it worked!).

Project finance as a competitive tool

How to integrate project financing into the bid Contract / tender bidding Real turnkey construction contracts

Case study: Pego, Portugal (Power) How could a 15-year powerpurchase agreement (PPA) support a 30-year financing? How did the cash sweep work? What sort of refinancings can be done?

Practical case study: PPP bidding Croydon Tramlink, UK The ABN Amro Sydney model

New horizons for projects and funding sources Green funds Emerging-market funds Tax structures Performance insurances Infrastructure / development funds Capital markets - Wraps - Partial risk - Credit guarantees Islamic project finance Credit derivatives
Note the pre-course pack / CD includes the ProjectFinance Risks chapter and the suite of cases and cashflow models.

Energy sector preferences Power, oil & gas, refineries, LNG, GTL, coal, uranium Wind, biomass, wave, geothermal Criteria to choose project finance: Sponsor / constructor / government /institutions Comparison with corporate/ government finance Structure: participants / choice of special purpose vehicles Oily structures

Reserves-based financings
Case studies: Cairn India (Oil) This Borrowing-Base structure includes two strong features: IFC partial-credit repayments and pre-specified criteria applied to the base. Addax Petroleum (Oil) The classic field addition and reserves-classification creep applied to this Borrowing Base. Jubilee, Ghana (Oil) Two mega 7-year BorrowingBases have been structured for this huge oilfield development. Some credit given to 2P reserves.

Case studies: Train F, Indonesia (LNG Plant) One of the two structures to use this approach. How does it address the World Bank negative pledge?

many world-first Project-Finance applications and particularly relishes the cross-fertilisation of structures from one industry sector to another. Richard teaches the full range of Project-Finance courses around the world. He is the author of the self-study guide and CD-ROM on Project Finance as well as two books: Advanced Project Financing: Structuring Risk, 1st Edition, and Project Finance in Asia Pacific: Practical Case Studies for Euromoney Books. Richard is a Visiting Fellow at the Applied Finance Centre for Macquarie University throughout Asia and gives the Project Finance core and Infrastructure Finance elective

for the University of Stellenboschs Master in Development Finance in Cape Town, South Africa. He delivers the Project Finance subject at the Grenoble Graduate School of Business, France.

inance

Coogee, Montara FPSO, Australia (Oil) This is a classic combination of Borrowing Base and FloatingProduction-Storage-Offloading (FPSO) financing with a reserves tail.

Case studies: Kutubu, PNG (Petroleum Reservoir Engineering) Examine the key aspects of field interpretation, especially the impact of faulting. Paiton (Coal Supply), Indonesia This worked example of fuel sourcing due diligence is a stark reminder about the scope of work for project financing consultants.

PNG LNG The word blockbuster certainly applies to this huge project financing with an interesting uncovered/sweet-and-sour political risk portion, even post global financial crisis (GFC). Sabine Pass, USA (LNG Regas) This LNG regasification (sometimes called an LNG terminal) project financing sequence very effectively addresses the push-pull market aspects. Nam Theun 2, Laos (Hydropower) This isnt just a mega politicalrisk packaging exercise, it stretched the project evaluation aspects the furthest in the world! Colowyo, USA (Mine-Mouth) An excellent example of why the bond markets have more appetite for risk in this minemouth coal supply project financing.

New horizons Specialist funds Islamic financing

Case studies: Jinguan Phase II, China (Power) All monolines (but one) are in trouble post GFC. How did a single A monoline work in the case of a Chinese power-plant project financing (credit enhancement). ALBA, Bahrain (SmelterPower) This deal included straight project financing; an Islamic tranche; and an aluminium load. Equate, Kuwait (Petrochemical Plant) In this case, Ijara (Islamic leasing) was bundled with local and international bank financings. Hubco, Pakistan (Power) Often cited as the first example of Islamic project financing outside Malaysia, this structure also included Partial-Risk Guarantees for four government commitments. MoSAGas (Pipeline) Cross-border projects are always tricky, but the credit of the country-of-origin was guaranteed by a development bank.

Key metrics for power project finance

Case studies: Petropower, Chile (Cogeneration) This beside-the-fence deal processes oil refinery bottoms/ residual. How important was the 100% liquidated damages (LDs) in the 144A financing? Merchant Power Plants Examine the 11 Risk structuring alternatives. What four studies are required for a merchant-power project financing?

Day 5

Project finance analysis: criteria Desirable cashflow ratios - Use / abuse of EBITDA PV ratios / discount rates Liquidated damages / delayin-startup insurance
Case study: Keadby (Power) This is the actual LD profile for this power plant project financing. What does the heatrate LDs imply?

Project finance funding Local currency Export credit agencies / bilaterals Cross border Multilateral agencies Equity variations Capital markets Leasing Commodity-based funding
Case studies: FPSOs Leasing and oil field financing all-in-one. What are the advantages? Bass Strait, Australia (Oil & Gas) The largest monetisation of oil & gas royalties outside the USA. LNG, Qatar A clever structure to establish a two-train LNG plant meant more project bond financing and less Export-CreditAgency (ECA) dependence.

Ratings Criteria for energy project financing Impact on the corporate rating
Case studies: Hero Asia, Hong Kong (Power) Doing a deal in China isnt easy. How did these coal-fired power developments achieve a sovereign rating equal to China? Moodys The many criteria, including breakeven economics and costcurve positioning, are laid out.

Role of independent advisors Engineers / financial / accounting /tax / legal / environmental/ market Need for a construction-cost audit?

SAVE TIME AND MONEY WITH IN-HOUSE TRAINING

In-house training is an efficient and cost effective way to ensure that your employees are equipped with the knowledge and skills needed to make a real impact in your organisation. Training can be arranged for anything from small groups to entire divisions and will take place at a time chosen by and convenient to you. For more information on holding these courses, or any other Euromoney Training course in-house, please contact: Joanne Ma, Division Manager, Financial Training Tel: +852 2111 6620 Email: joanne.ma@euromoneyasia.com

Secure your place! Register before 25 July 2011.

Email

training@euromoneyasia.com

+852 2520 1481

Telephone

Facsimile

+852 2866 7340

Project Finance Masterclass

22-26 August 2011 Hong Kong

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on 22-24 August 2011, Hong Kong Energy Project Finance (HT4758) on 25-26 August 2011, Hong Kong
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Copyright Euromoney Training 2011