power project finance - informa connect
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Contact:www.iff-training.com+44 (0)20 7017 7190 [email protected]
POWERPROJECT FINANCEA cutting edge guide to the intricacies of financing power projects and the evolution of the power industry
Learning partner of
WHAT YOU WILL LEARNThe course will look at how the industry structure has historically driven power project finance and reviews the drivers for change that are occurring.
You’ll look at the history of merchant power transactions and outline the risks that sponsors and lenders may be taking and examine the approach of the banker to project analysis and debt structuring. Since the sponsor/borrower generally wishes to maximise project debt, the willingness (or otherwise) of the lender to provide more or less leverage is clearly crucial.
After the course, you’ll have a project financing “toolkit” incorporating. project risk appraisal and mitigation. project quantitative analysis and debt sizing structuring. project finance loan documentation
You’ll use case studies which have been specifically designed to illustrate the issues covered in the course. You will master:
. The key technical aspects of the sector - as they affect a provider of finance
. The project financing techniques and structures typically used in the conventional and renewable power generation industries
COURSE LEADERNEIL EDMONDS
Neil Edmonds has worked in the banking industry for over 35 years, with a particular focus on the Power & Utility and the Oil & Gas sectors. Over the past 4 years of his banking career, Neil has worked in the Loan Syndications team at Standard Chartered Bank focusing on Structured Finance transactions.
Neil’s involvement in the Power and Utility sectors dates back to the privatisation of the UK utility companies from 1989 onwards. Neil has been heavily involved in:
. The financing and subsequent, re-structuring of power generation assets in the UK. The prime example being the evolution of the 4GW Drax power plant, that in turn has:
– been privatised within National Power
– sold by National Power to AES and financed against adistribution company Power Purchase Agreement (PPA)
– gone into bank lender ownership, when the PPA providerwent in to insolvency
– the sale of Drax by the bank lenders/owners via IPO
– the transformation of the coal fired plant into a biomassplant, thereby becoming a renewable energy plant
. The financing of power and water desalination plants throughout the Middle East
. The financing of power plants in Europe and Asia
. The financing of thermal and renewal power plants in Africa, together with significant Country Risk mitigation
. The financing of onshore and offshore wind plants in UK and western Europe
ABOUT IFFIFF has been the chosen training provider of the world’s best finance and energy professionals since 1991. We are part of Informa PLC and the learning partner of the SuperReturn and Flame series of events.
• We continually develop and improve our training to makeit more effective for you
• You’ll learn from practising, highly-experienced financialexperts
• You’ll experience interactive and practical training -implement what you learn straight away
• We limit class sizes so the trainer can adapt the contentto suit you
DATES & PRICE
Please contact a member of our team for more details
CONTACT US+44 (0)20 7017 [email protected]
IN-COMPANY TRAININGIFF’s bespoke training solutions will help you address your specific key business challenges. The programme is designed for you, with content focusing on the issues you and your teams are facing. The course can then be delivered at your choice of location face-to-face, digitally or a combination of the two.
. Tailored content - 100% targeted to cover your needs
. No travel or time out of the office – we will come to you
. Value for money – train teams of staff at the same time
. Risk free – we’ve been doing this for over 30 years
For more information please contact:
Leigh Kendall on +44 (0)20 7017 7190 or email: [email protected]
Contact:www.iff-training.com+44 (0)20 7017 [email protected]
COURSE AGENDA
THE PROJECT FINANCE “TOOLKIT”Project Finance Essentials• What is project finance? - Definition• Differences between corporate & project
lending• The cashflow “envelope”; Cashflow Available
for Debt Service (CFADS)• Why do sponsors choose project finance?• The risk-reward relationship with the project –
sponsors & lenders
The Toolbox (1) – Qualitative Risk Analysis • Sponsor risk• Country limits / country risk mitigation• Construction / completion risk• Technology risk• Supply issues• Offtake factors• Operation & maintenance risk & structures• Insurance issues• Consents & approval matters / regulatory
hazard• Environmental & social issues
The Toolbox (2) – Debt Sizing & Sculpting• CFADS – the starting point• Cover ratios
– using the ADSCR – using the LLCR / PLCR as a “sense-check”– cover ratios in debt sizing & stress testing
• Base case design – control of inputs and macroeconomic parameters
• Sensitivity running – what does the banker test?
• The IRR/cover ratio interface• Impact of control accounts on sponsor return• Getting to the optimum debt level
The Toolbox (3) – Project Finance Loan Documentation• Control accounts & the cashflow “Waterfall”
– types of control account - disbursement, revenue, compensation, debt service reserve & maintenance reserve accounts
– the cashflow waterfall – purpose, typical priority ranking and variations
– the documentation process> keeping it tight and focused> the lender / borrower / counsel interface > different approaches to the term sheet > designing the term-sheet for economy
while covering the key commercialissues
• Documentary terms and conditions– the “boiler-plate” – understanding the
jargon– the key “command & control” mechanisms
in project finance agreements> conditions precedent> reps & warranties> covenants> events of default
• Borrower/sponsor needs and “hot-buttons”– what does everybody argue about most?– accessing the loan facility– pricing issues– operating flexibility & control– cash-traps & “IRR-killers”
POWER PROJECT FINANCE – SECTOR PRACTICEWho are the Key Players in Power Project Finance?
The Industry Structure and how Power Project Finance has Evolved • Outline of Industry structure and variations. • Early Power Purchase agreements and
associated fuel supply contracts• The emergence of selling power generation
capacity rather the power. The capacity charge and energy charge structure
• CHP and the implications of continual heat demand
• Merchant power plants - what are they and how it went wrong for sponsors and Lenders
• Gradual emergence of highly subsidized renewable energy projects
• FIT, green certificates and contracts for differences
• Assessing the resource risk• Rapid evolution of large scale renewables,
subsidy reduction and eliminations, auctions and the development of zero subsidy off shore wind
• How Project Finance has become the key currency in renewable energy - why renewables have driven the growth in Power Project Finance
Changes Likely to Occur Over Next 20 Years• Must run generation technologies – zero
short run marginal costs, pushing out thermal plant and destroying the economics of major electrical utilities
• Decarbonisation policies/ taxes • Distributed generation – behind the meter• Demand Response • Storage – how, when & cost. • Technology – where will solar PV and
technologies be in 5-10 years
The Offtaker• Assessing the long-term credit risk of the
Offtaker• Assessing the cashflow of the offtaker and the
regulatory position that underpins it• Political and Credit support for offtakers in
emerging markets• Risk assessment of Offtaker and the drivers of
their cashflow• Risk Mitigation in emerging markets
The Role of the Regulator and the political climate• Classic role & powers of the regulator• Role of the regulator in encouraging renewables• Power policies are highly political and highly
localised
Risk Features of Power Project Finance – Key Drivers for Debt Structure & Pricing • Offtake regime – PPA/tolling /merchant/feed-in
tariff/renewable certificates• Technology issues• Operation & maintenance regime
Power Project Finance MethodologiesDebt Structures for Conventional Power (PPA, Tolling & Merchant) & Renewable Power (Feed-In Tariffs & Renewable Generation Certificates) Compared & Contrasted • Debt/equity ratios and structures• Risk allocation patterns• Debt maturity• Debt pricing levels
KEY POWER PROJECT FINANCING CONTRACTS – THE POWER SALE ARRANGEMENTSThe way in which power is sold (PPA, merchant, tolling, feed-in tariff with preferential despatch etc.) is arguably the most important determinant of project debt structure and therefore these agreements are worthy of particular attention. During the course the key features of different power sales agreements are discussed in depth, in particular which risks are allocated and how this affects the amount and cost of the debt which can be raised.
KEY POWER PROJECT FINANCING CONTRACTS – OPERATION & MAINTENANCE AGREEMENTSBecause the predictability of stable cashflow is critical in determining the risk appetite of a lender, the operation & maintenance regime to be applied in a power project is analysed very carefully by its debt providers. During the course the key risk transfer provisions of O&M agreements – and their limitations - are reviewed in detail.
PUTTING IT INTO PRACTICE The course has a strong practical emphasis throughout and case studies are used, particularly to reinforce learning. There are three basic types of case study:
CASE STUDYMini-Cases – Shorter Class-Based Sessions – where participants are
required to identify the pros and cons of a project from a bankability perspective and also to set out requirements for additional due diligence.
PRACTICAL SESSION
Peer Review Committee Sessions – more intensive cases where the Course Faculty acts as presenter and four
participants are selected to act as a committee to screen new transactions before they go to full Credit Committee.
EXERCISETerm Sheet Case Studies – exercises where the course participants are required to review a project financing term-sheet for
completeness and acceptability from the perspective of either the Lender or the Borrower.
The sector focus of the cases used will depend in part on the particular interests of each trainee group. When this course has been delivered on an in-house basis, case study topics have included combined-cycle gas, power & desalination, wind-power, biomass, CHP and photovoltaic projects.
CPD Certified:
IFF is recognised by the CPD Certification Service and have been approved to award CPD points towards professional development certifications. Attendance at this course will earn you 40 CPD points.
COURSES IN THE IFF PROJECT FINANCE PORTFOLIO
See the website for full details www.iff-training.com
IFF is the learning partner of
THE MECHANICS OF
PROJECT FINANCE
Contact:www.iff-training.comTel: +44(0)20 7017 7190Email: [email protected]
Dates:10 July 201904 December 2019
POSTGRADUATE CERTIFICATEDELIVERED BY DISTANCE LEARNING OVER 16 WEEKS
Learning partner of
THE MECHANICS OF
INTERNATIONAL TRADE FINANCE
Contact:www.iff-training.com/pfdl Tel: +44(0)20 7017 7190Email: [email protected]
Dates:22 May 20196 November 2019
POSTGRADUATE CERTIFICATEDELIVERED BY DISTANCE LEARNING OVER 16 WEEKS
Learning partner of
THE MECHANICS OF
RENEWABLE ENERGY
Contact:www.iff-training.comTel: +44(0)20 7017 7190Email: [email protected]
Dates:11th September 20194th March 2020
POSTGRADUATE CERTIFICATEDELIVERED BY DISTANCE LEARNING OVER 20 WEEKS
THE MECHANICS OF
CORPORATE FINANCE
Contact:www.iff-training.comTel: +44(0)20 7017 7190Email: [email protected]
Dates:9 October 20191 April 2020
POSTGRADUATE CERTIFICATEDELIVERED BY DISTANCE LEARNING OVER 16 WEEKS
Learning partner of
Dates:16-18 October 20192-4 December 2019London
Contact:www.iff-training.comTel: +44 (0)20 7017 7190Email: [email protected]
PROJECT FINANCEObtain a thorough grounding in the techniques of limited-recourse project fi nancing when applied to a range of capital-intensive industries
Dates:14-16 October 20191-3 June 2020 London
Contact:www.iff-training.comTel: +44 (0)20 7017 7190Email: [email protected]
POWER PURCHASEAGREEMENTS A complete practical guide to the commercial and strategic dynamics of power purchase agreements
IFE
OIL AND GAS PROJECT FINANCEDevelop your knowledge of project fi nancing along the hydrocarbon chain, working with an oil and gas banker with 30+ years of lending and advisory experience
Dates: 28-30 October 2019London
Contact:www.iff-training.comTel: +44 (0)20 7017 7190Email: [email protected]
MASTERING PROJECT FINANCEDOCUMENTATIONA unique programme specifically designed to help practitioners gain a deeper insight into the mechanics of project finance documentation
Dates: 25-27 November 201911-13 May 2020London
Contact:www.iff-training.comTel: +44 (0)20 7017 7190Email: [email protected]