Energy infrastructure has a variety of needs and objectives whether in oil & gas, power or mining. Different types of assets need to be financed such as power plants, exploration platforms, distribution networks and transport. These projects often necessitate large investments and bear high risk with various constraints such as very restrictive environmental and regulatory frameworks.
Project financing is an adapted mean of financing for high risk energy assets out of future cash flows generated by the asset. Project finance is about assessing risks to future cash flow: identifying risks, allocating them appropriately and ensuring that the responsible parties are adequately incentivised to manage their assumed risks efficiently.
Participants will explore the different sources of financing, Pros and Cons of Project Financing, and compare Corporate Debt to Project Financing. They will be presented with the principles and the techniques involved in the financing of projects on a limited or non- recourse basis. Students will get an understanding of why “project” finance is used as a means of finance as opposed to the traditional sources of funding.
The course will also cover the importance of risks identification and allocation (covenants, margins, hedging, recourse / non-recourse, etc.). Projects Sponsors’ and Lenders differences of views will be highlighted. The course will discuss the relationship between Project’s economics, Project Sponsors’ creditworthiness and the pricing of debt.
Students will get an understanding of the complexity of a Project Financing and describe the rigorous and lengthy preparation preceding a successful closing of a deal. Participants will be presented with key financial ratios that project financiers typically use to assess lending opportunities.