Contents:

Contents of Project Finance - Training Manual WORKBOOK ONE Introduction 2 Risk sharing 2 Definitions 3 Types of project finance 3 Misconceptions 4 Key characteristics 4 Sectors 4 Components 5 Participants 6 1. Sponsors 6 2. The borrower 6 3. Financial advisers 8 4. Arrangers/lead underwriters 9 5. ECAs/MLAs 10 6. Agent/trustee 10 7. Lessors 10 8. Independent experts 10 9. Lawyers 11 10. Governments 11 11. Construction contractors 12 12. O&M companies 12 13. Insurers 12 14. Swap counterparties 13 15. Suppliers 13 16. Equipment vendors 13 17. Offtakers 13 18. Transportation companies 13 19. Ratings agencies 14 Stages in project financing 14 1. Identification of the market 14 2. Technical feasibility 15 3. Financial feasibility 15 4. Commitment letter 15 5. Mandate 15 6. Syndication 16 7. Documentation 16 8. Financial closing 16 9. Administration 16 Conclusions 16 Answers to test questions 17 Glossary 18 WORKBOOK TWO Introduction 2 Risk definitions 2 Risk classification 2 Statistical 2 Modellers 3 Checklist 3 Project finance 3 Insurance 3 Structural/jigsaw 3 Risk structures and allocation 4 Cash flow and risk 4 Operating risk 5 Technical component 5 Cost risk component 6 Management component 7 Participant risk 8 Completion risk 9 Supply risk 11 Market risk 12 Infrastructure risk 13 Environmental risk 14 Political risk 15 Force majeure risk 17 Foreign exchange risk 17 Engineering risk 18 Syndication risk 18 Interest risk 19 Legal risk 20 Conclusions 20 Risk tradeoff 20 Answers to test questions 22 Appendix: Sensitivity testing 2 WORKBOOK THREE Introduction 2 Power 2 Transportation/tollways 4 Railways 5 Airports 6 Ports 7 Mining 8 Oil and gas 9 Telecoms 12 Satellites 13 Water/waste water 14 Answers to test questions 15 WORKBOOK FOUR Introduction 2 Engineering feasibility 2 Independent reviews 2 Financial feasibility 3 Project cash flows 4 Sensitivities 4 Operations report 6 Operating cash flow report 6 Gross revenue 6 Operating costs 7 Financing costs 7 Financing reports 9 Capital costs 9 Cash flow sensitivities 9 Ratio analysis 13 Interest cover 14 Principal cover 14 Debt service cover ratio 14 Loan life ratio 15 Project life ratio 15 Debt:equity ratio 15 Residual cover 15 Payback 16 Present value 16 Accounting ratios 16 Answers to test questions 17 Appendix: Model AB 18 Key assumptions 18 Base case results 18 WORKBOOK FIVE Introduction 2 Structuring 2 Construction phase 2 Completion phase 2 Post-completion repayment phase 4 Structure types 5 Funding 6 Equity 7 Subordinated debt 7 Banks 7 Local currency 8 Derivatives 9 Export credit agencies 9 The main ECAs 10 Supplier credits 10 Multilateral agencies 10 Political risk insurance 11 Debt:equity swaps 13 Capital markets 13 Rating 14 Tax-effective structures 15 Recourse 16 Advisers 18 Information memorandum 18 Syndication 19 Agency/trustee 19 New structures/funding 19 Answers to test questions 21 WORKBOOK SIX Documentation framework 2 Project contracts 2 Concession agreement 3 Joint venture/shareholders' agreement 4 Management agreement 5 Turn-key/construction contracts 6 Insurances 7 Political risk insurance 8 Supply agreements 8 Offtake contracts 9 Site lease 9 Approvals 10 Financing agreements 10 Loan agreement 10 Covenants 11 Representations and warranties 12 Defaults 12 Agency 12 Interest and margin protection 12 Mandatory prepayment 12 Disputes 12 Reporting 12 Security documents 12 Mortgages/charges 13 Assignment 13 Offshore proceeds accounts 13 Escrow accounts 13 Financial instruments 13 Inter-creditor agreement 13 Completion guarantees 14 Step-in rights 14 Support/comfort letters 15 Legal opinions 15 Conclusions 15 Answers to test questions 17