Markets and Companies LawPrinciples of Project Financing - 2017-2018
1
What is Project Finance
• Definitions and terms• The basic components of project finance• Project finance vs. balance sheet or asset-based
finance• Non-recourse vs. limited recourse project finance• Other structures
2
Why Project Finance
• Uses of project finance• Advantages• Disadvantages• International project finance; does location matter?• Does project finance suit any projects?• The concept of bankability
3
Project Finance participants
• Project sponsors• Project company/ies• Borrowing entity/ies• The lenders, banks and bondholders• Any banks?• The “agencies”, international vs. domestic
4
Project Finance participants - continued
• The project chain; contractors, suppliers, output purchasers
• Operation and mantainance• The advisors: technical experts, financial advisors,
legal experts• Insurers• The host country government
5
Project Finance structures• Different financial structures• Commercial loan financing• Export credit financing• Lease financing• Bond financing• “Build-own-transfer”• Co-financing• Production payments and forward purchase
agreements
6
Project Finance Ownership Structure
• General considerations• The pre-development stage• Determining a suitable ownership structure• Sponsors and parent companies• The “special purpose” company• The role of the host country
7
Project Finance Ownership Structure -continued
• The form for a suitable structure• Corporation• General and limited partnerships• Joint ventures• Consortia and temporary arrangements• European Economic Interest Group (EEIG) • A magic word: flexibility
8
Project Finance Ownership Structure -continued
• Implementing the ownership structure• Legal formats and contract flexibility• Is there a law of project finance?
9
Risky business?
• Risk identification, allocation and mitigation• Perspectives and objectives• The risk matrix• Cross-border risks• Legal risk• Commercial risk• Force majeur and hardship clauses
10
The Feasibility of a Project Finance
• The feasibility study – purpose and contents• Host country environment• Economic feasibility• Environmental feasibility• Regulation• Role of agencies (World Bank, OECD, IFC)
11
Project Finance Documentation• Contracts are king• Types of documents• Non recourse provisions• Protection of sponsors vs. lending community
requirements – bankability• Take-or-pay and similar clauses• Transnational contracting• Internationalization of contracts• When things go wrong
12
Representation & Warranties in Project Finance Contracts• Role and purpose• Mechanics of representation and warranties• Legal framework: reps & wars vs. guarantee
obligations• Review of sample provisions
13
Host Country Agreements in Project Finance• The role of the host country• Preliminary agreements and government approvals• Tendering processes – how do they fit with project
finance structures?• Concessions and licenses• Implementation agreements• Infrastructures and environment• Sovereign immunity and the “act of State doctrine”• What if the government changes?
14
Top Related