039 – Essentials of Project Finance

Location & Date: Houston, Texas USA. Jun 26-30 | Houston, Texas USA. Oct 2-6
CEUs: 6.0

Registration Discount: $3,900 – You must Register 60 days in advance and payment must be Paid In Full 30 days prior to the start of class.

Course Overview

This course is designed to provide participants with an essential understanding of the principles and approaches to project finance and how to successfully apply practical tools and techniques for project finance valuation, analysis and modeling. Students will interact to explore step by step processes for evaluating project opportunities, checking the viability of the project, project appraisal, risk evaluation, structuring the contract.

Our goal is to provide a highly interactive and integrative professional development environment where participants discuss and address the need in the industry today for a systematic approach for project appraisal and evaluation while learning how to build a Project Finance Model and develop checklists for key stages of the project financing process. We will do this by providing participants with an intensive overview of the core principles and practice of project finance to build a thorough understanding of the crucial factors and techniques used in structuring project finance deals.

Course Objective

The objective of this course is to enable professionals who work with investment fund and are interested in the principles of analyzing project finance risk and in further understanding the main elements of project finance debt. Participants will gain a deeper knowledge in the important aspects of Project Finance such as cost estimation, project feasibility study, risk analysis and mitigation, and important financial ratios required for project finance modeling through learning and development in the following areas:
• An Introduction to Project Finance
• The Project Finance Process
• Project Investment Criteria
• Managing Project Finance Risk
• Project Finance: Valuation Issues
• Managing the Project Contract
• Documentation and Information Quality

Target Audience

Analysts, Managers, Senior Managers, Directors; Financial professionals including bankers and financial consultants; Project Managers and government officials responsible for project financing and infrastructure investments.

Course Outline

Module 1: An Introduction to Project Finance
• Project finance defined
• History, evolution and economic impact of Project Finance
• The Basic Project Finance Structure
• The Project Finance Timeline
• The Risk/Reward Relationship

Module 2: The Project Finance Process
• Project Finance – Where to begin
• Roles and responsibilities of various players
• The Typical time line
• Risk sharing among the players; how much risk will the lenders accept
• The typical time line
• Feasibility study and Financial modeling
Experiential Exercise: Preparing a Feasibility Study

Module 3: Project Investment Criteria
• Measures used by Investors including Payback period, NPV, IRR
• Measures used by Lenders: Leverage, Debt service, Loan Life
• Project or Reserve Life Cover Ratios and economic rationale
• Rating agency default statistics and rating criteria
• Alternative re-payment methods for debt structuring

Module 4: Managing Project Finance Risk
• The Project Finance Risk Analysis
• The Design of Risk Sharing
• Risk Mitigation Strategies
• Financing Options
Experiential Exercise: Risk Identification

Module 5: Project Finance: Valuation Issues
• Determining a Baseline Budget
• Managing Cash Flow
• Understand how financial statements are constructed and how to identify common problems
• Build a credit rationale in order to make and substantiate investment decisions
• Compare and contrast with other forms of debt capital

Module 6: Managing the Project Contract
• Understanding the life cycle of the contract
• Launching the project: The bid phase
• Establishing the baseline including buyer/seller expectations
• Producing a turnkey contract
• Change control: variation orders, claims and changes to schedule
• Dispute settlement process
Case Study: Contract Life Cycle Management

Module 7: Documenting the Deal and Information Quality
• The process of documenting a project financing transaction
• The components of the loan agreement: Purpose, structure and key parts
• Control mechanisms to protect lenders from default
• Types of documentation and reporting
• The importance of clarity, transparency and timeliness of information

Tuition: $4,000