This course has been designed to introduce participants with little or no prior knowledge of project finance to those fundamental aspects that are applicable to all project finance transactions.
Prior to the Course, participants will each receive a package of material (written and supported by three short videos) describing and explaining the basics of project finance fundamentals, including:
- The Quest for Leverage
- What is Project Finance?
- Limited and Non-Recourse Finance
- Parties to a Project Finance
- Introduction to the Financial Markets
- The Importance of Cashflow
- Why Project Finance is used
- The Project Finance Market – Recent Trends
This Course will be delivered via Zoom by a specialist trainer over 2 half day (3 ½ hour ) sessions.
In the first session, participants will review the pre-course material before learning about the qualitative risk analysis that underpins all project finance transactions, reinforced through a specifically developed case study, the background to which participants will have received prior to the course.
In the second session, participants will focus on quantitative risk analysis to gain an understanding how debt facilities are sized. We will use a financial model that has been specifically designed for training purposes to illustrate how qualitative risks can be quantified through effective sensitivity analysis.
Course Overview – Day 1
The Fundamentals of Project Finance
- What is Project Finance?
- Review of Pre-Course Material
Risk Identification & Mitigation
- Sponsor Risk
- Country / Political Risk
- Sources of debt finance
- Construction & Technology Risk
- Supply / Feedstock Risk
- Offtake risk
- Operation and Maintenance Risk
- Regulatory Risk
- Environmental, Social & Governance Risk
Case Study Exercise – Risk Identification
Using the risk identification framework to identify key risks and propose suitable mitigants of a renewable energy project.
Day 2
Financial Risks
- Understanding the Financial Model
- Key Measurement Tools and Debt Sizing
- Repayment Profiles & Debt Tenors
- Key Financing Risks and Mitigants
- Hedging instruments
Financial Model Analysis
- Key inputs
- Sensitivity Analysis
Case Study Exercise – Sensitivity Analysis
Establishing and running financial model sensitivities to quantify the qualitative risks previously identified in the renewable energy project