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.
Hanover Power Station
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