Day 1
Introductory Recap quiz on Project finance acronyms, as a recap of our first training session, run last year for your team, on Project Finance fundamentals
- Brief review of standard O.T and D.B.F.O.M concession financing structures, applied to the Oil & Gas (O&G) industry. Special focus on the bankability of O&G trading companies acting as offtakers. Overview of hard commodity markets and key points of focus when Due Diligencing a project in such industry.
- Going through the main practicalities of an O&G project financial model and assessing the debt capacity of a project with a potentially high cash flow volatility. Cash waterfall management issues: introducing on cash sweep, hair cut, claw back and top up clauses to protect your position as lender.
- Workshop on Debt sizing (via CFADS) for an LNG project located in Australia or South America
- Preparing your model with a fine-tuned qualitative Risk analysis: carrying out the Due diligence from the lenders' perspective. The role of technical advisors. Reviewing the Project Risk Matrix to assess risks, identify risk mitigants and prepare sensitivities for the cash flow model
- Case study : Delegates carry out the Due Diligence of a Renewable energy (offshore wind) project recently developed in Scotland
- Which sensitivities are key to address when modeling Renewable energy projects?
- Technology risks: reviewing modelling issues on new technos such as floating offshore wind energy, floating solar, energy storage issues. How to stress the techno risk in your model?
- Construction risks? Reviewing EPC contract key clauses Turnkey or not? Impact on CAPEX sensitivities
- Offtake risk and Power Purchase Agreements (PPA's)
Introducing the concept of “Revenue stack”
Special focus on wholesale electricity tariffs typology in Continental Europe: regulated versus non regulated (“merchant”) tariffing structure when financing energy projects
Impact on the debt amortization period. How to sculpt the debt accordingly?
- Environmental & Societal risk? Special focus on the Equator Principles and IFC Principles. Impact of IESG impact management programs on the project's CAPEX and OPEX
- Operation & Maintenance risks: Fitting the Debt Service Reserve Accounts (DSRA) & MRA provisions in your cash waterfall
- Interest Rate and (possibly) FOREX risks? Hedging considerations
- Natural resource risk. Reviewing P50 – P90 energy yield assessments (EYA's) and how they are fit in the cash flow model.
Day 2
Warm Up Quiz: reviewing notions presented on Day 1
- Project Cash flow modelling Key considerations when building up your (Excel) cash flow model. Reviewing Capex, Opex.
- Understanding IRR and WACC issues How do lenders build their stress scenari? Review of the main sensitivity parameters.
- Ratios used in the project Due Diligence and model: about DSCR, LLCR, PLCR. Example of Debt Sculpting to Achieve Target DSCR
- Workshop on DSCR, LLCR and PLCR: reviewing the cash flow model of a toll road project
- How downside traffic scenari can be accommodated with mini perms financing solutions in a toll road project? Cash sweep mechanisms and how
- Case study: Review of a commonly used financial solution for toll roads through Public Private Partnerships (PPP's). Distinguish Authority – based and User-based PPP's and see its impact on the cash flow generation
- Conclusion: financial market perspectives for the near future and impact on Project debts.
- Course evaluation