Successful PPPs have one thing in common: a solid and sound structure fuelled by interdependence from all stakeholders involved. Besides a shared vision, we require the knowledge and the capacity to MAKE IT HAPPEN.
Capacity building starts NOW. We need to understand the critical success factors of PPPs and how concepts translate into real progress, anticipate draining inhibitors, find effective solutions, learn from tried and tested best practices and most importantly, move beyond them and explore the avenues to INNOVATE.
This master class aims to do just that. Beginning with an in-depth understanding of how PPPs and project finance work, to policy and law, all the way to contract mechanisms, financial structuring and risk analysis, we seek to push our participants to master and innovate, with the aid of a good number of carefully designed group exercises and case studies.
The final day of the course will be devoted to a series of case studies of actual current projects in the power, transport and social infrastructure sectors etc in Africa, which will demonstrate how the theoretical knowledge gained in days 1-3 is applied in practice.
Welcome you to join this timely high-value course!
PPP frameworks already exist or are being put into place in many countries in Africa (e.g. Nigeria, Ghana, South Africa, Côte d’Ivoire, Kenya, Uganda, Tanzania, Rwanda, Zambia, Angola etc). However, the number of actual projects, especially those successful ones, remains low. One of the key challenges to further progress is capacity building in both the public and private sectors to address the faced bottlenecks.
This course will combine intensive trainings on PPP financing, policy and law, and concentrate on a practical approach to procuring and structuring PPP projects, with a strong emphasis on real-life examples. The theoretical project management, financial and legal frameworks will be studied in detail, and case studies will then be used to show how the theory works in practice.
The course offers a unique combination of intensive trainings on PPP financing, policy and law by a trainer with extensive practical experience, rounded off with detailed case studies showing how theory is applied in practice.
Participants can look forward to learning about:
- The role of PPPs and project finance in developing public infrastructure in Africa
- PPP policy and law
- Sources of finance
- Risk analysis in PPPs
- PPP contracts
- Major sub-contracts (construction, operation etc)
- Financial structuring of PPPs
- Loan documentation
- Public-sector evaluation and procurement of PPPs
Certificate of Attendance
Upon the successful completion of this course, you will receive a Certificate of Attendance bearing the signatures from both the Expert Trainer and the Course Organizer. This Certificate will testify your endeavour and serve towards your professional advancement.
Day 1: PPPs, Project Finance & Policy
PPPs fundamentals and key aspects
- Public infrastructure
- What is a PPP?
- Development of PPPs
- South African Treasury Regulation 16 (2004)
- ‘Boundary lines’ for PPPs
- Public procurement vs. privatisation
- The public-private spectrum
- Projects suitable for PPPs
- Sectors suitable for PPPs
- PPP contracts - key features
Project finance and its application
- What is project finance?
- Why do I need to know about this?
- Where did project finance come from?
- Industries using project finance
- Typical project-finance structure
- Why investors use project finance
- Benefit of project finance to the public sector
Sources of investment & debt
- Equity and debt
- Development finance institutions (DFIs)
- Export-credit agencies (ECAs)
PPPs in Africa
- Problems for PPPs in Africa
- Banks’ role in sub-Saharan PPPs
- DFIs / ECAs in sub-Saharan Africa
- Africa-related funds (DFIs)
- Africa-related funds (private sector)
Public-sector institutional & legal framework
- PPP policy
- Is a PPP law required?
- South African PPP framework
- The role of the PPP Unit
- PPPs vs. regulation
- Public procurement
Project development & management
- Project development
- Joint-venture issues
- The Project Company
- Shareholder Agreement
Basic financial analysis
- Understanding financial basics
- Net present value
- Internal rate of return
- Uses of DCF/IRR calculations in PPPs
- Problems with DCF & IRR
Group Work - Calculating a tariff
Day 2: Risk Analysis & Financial Structuring
Risk analysis - commercial risks
- Risk allocation
- Public-sector and risk
- Investors and risk
- Lenders and risk
- Risk transfer - outline framework
- Site risks
- Construction risks
- Other construction-phase risks
- Construction contractor / Contracting Authority risks
- Revenue risks
- Fuel or other input supplies risk
- Operating risks
- Residual-value risk
- The role of insurance
Macro-economic risks and hedging
- Interest-rate risk
- Interest-rate swap
- Swap breakage (unwind)
- Interest hedging strategy/issues
- Inflation risk
- Inflation hedging
- Currency risks
Regulatory & political risks
- Change in law or regulations
- Political risk
- Political-risk insurance
- Sub-sovereign risk
- Debt interest-rate pricing
- Other debt costs
- Debt-service cover ratios
- Equity pricing
- Equity structure
- Equity-return measurements
- Timing of equity investment
- Debt structure
- Debt term
- The role of the financial model
- Key model inputs (project costs)
- Key model inputs (project characteristics)
- Key model inputs (finance/economic)
- Key model outputs
- Cover ratios and gearing/returns
- Model optimisation
- Debt term sheet
- Project Accounts
- Cash-flow waterfall
- Reporting requirements
- Cancellation & prepayment
- Legal ‘boilerplate’
- Events of default
- Lenders’ security
- Governing law and jurisdiction
- Value for Money
Group Work - Wastewater treatment project
Day 3: Contractual & Legal Structuring
Key types of PPP Contract
- Power purchase agreement
- Transport concessions
- Social infrastructure & ‘accommodation’ contracts
- Fuel & other input supplies
- Operation & Maintenance
Other key PPP contract issues
- Contract changes
Government support for PPPs
- Reasons for public-sector support
- Types of public-sector support
- Viability-Gap Funding (VGF)
- Part-construction of projects
- Minimum-revenue guarantee
- Debt underpinning
- Guarantee payment funds
- Implementation Agreement
- Basis for refinancings
- Benefit of refinancings - gain sharing
- “Rescue” refinancings
- Secondary market equity sale
What do lenders expect?
Group Work - ‘Freedonia’ independent power project
Day 4: Case Studies and Group Discussion
Day 4 will be devoted to a series of case studies of actual current projects in the power, transport and social infrastructure sectors in Africa, which will demonstrate how the theoretical knowledge gained in days 1-3 is applied in practice.
Case Studies will include:
- Bujagali Energy (Uganda)
- Songas (Tanzania)
- Kivuwatt (Rwanda)
- Cenpower (Ghana)
- Lekki Expressway (Nigeria)
- Bakwena Platinum Highway (South Africa)
- Rift Valley Rail (Kenya / Uganda)
Social Infrastructure & other sectors
- Queen ’Mamohato Memorial Hospital (Lesotho)
All participants will be split into 3-4 groups, to consider various aspects of one of the case studies, based on a background briefing that will be provided.
You will brainstorm and discuss on topics such as:
- What regulatory and legal environment is needed?
- Sources of finance and Bankability
- How could the PPP contract be structured? What are the key elements of such contracts?
- What are the key risks for the public sector, and how these be mitigated?
- What are the key risks for the private sector, and could these be mitigated?
The groups will then all make presentations.
Conclusion - PPPs for & against
Wrap-up of the 4-day learning (Day 4 ends at 12.30 pm)
Mr E.R (Ned) Yescombe,
- Over 25 years’ of practical experience in project finance and PPPs
- Expert global consultant on project finance and PPPs / PFI since 1998
- Clientele includes the World Bank, AfDB, ADB, U.K Department for International Development, Government Agencies and private companies etc
- Authoritative author of textbooks on project and PPP finance and policies etc; recognised by both practitioners and academics alike
- A law graduate of Oxford University
In the public sector, this master class will benefit officials from Ministries and Agencies of:
- Finance, including PPP units
- Public Works
- Other ministries and privatisation agencies concerned
In the private sector, this master class will benefit:
- Bankers involved in infrastructure finance
- Lawyers who wish to improve their understanding of the commercial and financial background of PPPs
- Engineers who wish to understand the particular requirements of working in PPP projects
- Construction companies and equipment suppliers involved with PPPs etc.
Protea Hotel by Marriott
Elgon Terrace, 9421 John Babiha (Acacia) Ave