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P17146 Evaluating, Structuring and Financing Power Projects
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Evaluating, Structuring and Financing Power Projects

27 – 28 June | Mandarin Orchard Singapore, by Meritus

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TEAM SAVINGS: REGISTER 2 DELEGATES & THE 3RD COMES FREE!

overview

Key Learning Outcomes

  • Key risks and mitigants
  • Financial evaluation
  • Capital structuring decisions
  • Choice of financing instruments and the use of Corporate Financing or Project Finance
  • Key commercial elements of the main commercial and finance documents to facilitate funding of project specific transactions

PLUS! Hands-On and Practical
Each session has Dedicated Case Studies and Group Exercises.

Who Should Attend

This training programme will be relevant to personnel involved in the financial evaluation and structuring of Power projects or Power companies in organisations such as

  • IPPs and Power Utilities across Fossil Fuels and any form of Renewables
  • Contractors
  • Equipment Suppliers
  • Banking / Finance
  • Government departments
  • Consulting / Legal
  • Development Finance Institutions
  • Fund Managers investing in the Power Sector
  • Corporates entering into long term power supply agreements

Testimonials

“Useful, Well Designed, Well Planned”
– Peng Lixin, Investment advisor, Hunan Xiangtou International Investment Company Limited

“Good presentation, Good professor, Good Place”
– Young Tae Kang Engineer, CGN Yulchon Generation Co Ltd

“Conducive group size, Good mix of participants, Trainer is very knowledgeable”
– Shawn Lee, Business Development MGR,Keppel Fels Limited

trainer

Malcolm Sullivan

Agenda

Day One

Session 1
An overview of key issues in the financing of Power projects

  • Overview of activity in Project Finance in the Power Sector
  • Project Finance vs. the financing of projects
  • The Project Finance “route map” –  an overview of the key issues in evaluating and structuring a Project Finance transaction
  • An overview of the process in a Project Finance transaction and the principal issues to consider including the motivations of the main parties involved in the transaction
  • Lessons of experience in the Power sector – what can be learned from past problem projects

Exercise / discussion: Review of a Project Finance in the Power sector to illustrate key aspects of the transaction and how it was financed

Session 2
Risk evaluation in Project Finance

  • Trends in power prices and changes in the relative economics of fossil based vs Renewable Energy projects
  • Key risks – construction, operating, counterparty and financial
  • Risks associated with different types of power projects – generation, transmission, distribution
  • Typical approaches to risk allocation
  • Risk issues of particular relevance to Renewable Energy projects – involvement of government in terms of tariff support and investment incentives, and impact of auctions for Renewable Energy projects in selected markets

Exercise: participants review background on a project and prepare a summarised” risk assessment” based on the risks and mitigants in the project

Session 3
The project financial statements and review of key assumptions – issues to consider and approach

  • Key elements in the structure of Project Finance spreadsheets
  • Review of a generic Project Finance spreadsheet to identify potential key influences on project viability
  • Determining what is realistic in terms of projected financial performance – use of benchmarks and sources of information
  • Lessons from the past – what can be learned from past transactions about the value of forecasts and feasibility studies

Exercise: reviewing the underlying assumptions – participants review background on a case study project to assess the underlying assumptions, and how they might affect the project cash flows and the key influences on the Project IRR

Day Two

Session 4
Corporate Financing vs other debt financing alternatives

  • Some of the key factors in choice of debt financing methods
  • Decisions impacting the use of debt financing techniques at different stages of the operation of a power project
  • Potential use of securitisation for power related projects

Case study: review of the financing structure of a corporate in the Power sector to illustrate their debt financing structure

Session 5
Sources of debt financing in projects and debt capacity – Project Finance

  • Rationale for Project Finance vs. other debt financing techniques
  • Using projected cash flows as a basis for assessing debt servicing capacity
  • Export Credit Agencies and Development Banks; bank debt vs. bonds; senior vs. subordinated debt
  • Interest and foreign exchange management issues in Project Finance
  • Review of selected Project Finance transactions – risk and return in structuring Project Finance transactions
  • Credit enhancement techniques

Exercise: review of a case study project to assess the debt servicing capacity and factors that influence the debt servicing capacity of the project

Session 6
How equity investors assess projects – financial yardsticks used by investors

  • Different types of equity investors in Power projects and their typical approach to achieving returns
  • An overview of the main project investment appraisal techniques and influences on Capital Structuring decisions
  • A brief review of the principles for calculating corporate cost of capital and use as a basis for evaluating project returns
  • Understanding the equity investor’s approach to achieving returns from the project company, including operating relationships with the project company, and cash extraction through re – financing
  • Summarised review of a corporate involved with the Power sector to illustrate their approach to capital allocation and how the business and company valuation has evolved as a result of disruptive change in the Power Sector

Exercise: developing a capital structure to balance the requirements of debt and equity providers

Session 7
Documentation and structuring issues in Project Finance

  • Rationale and structure of loan documentation
  • Key covenants and potential complications
  • Construction contracts and cost overrun guarantees
  • Intercreditor issues, including senior vs. subordinated debt
  • Third party credit support and security issues for debt financiers, including critical commercial issues in Concession agreements, offtake agreements, tariff support, completion and cost overrun agreements, and shareholder agreements

Case study – Structuring third party credit support and security: Participants produce an outline proposal for the capital structure, covenants, credit pricing, third party credit support, power purchase and other key commercial agreements, and security for an assigned case study project

Course Summary and review

when & where

27 - 28 Jun 2018

Mandarin Orchard Singapore, by Meritus
333 Orchard Road, Singapore 238867
Tel: +65 6831 6062 | Fax: +65 6737 3130
Mobile No.: +65 8298 9442
Contact Person: Tan Ai Li
Email: aili.tan@meritushotels.com
Website: www.meritushotels.com

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