This 2- day course will provide participants with a comprehensive overview of Project Finance as a financing mechanism for large projects and look at some of the key considerations to consider when contemplating a Project Finance Transaction.

The course is ideal Bankers, Lawyers and other Finance Professionals who want to get to grips with the fundamental principles of Project Finance.

Project Finance Overview:

➢ What is Project Finance
➢ Project Finance as a structured financing method
➢ Key characteristics of project finance
➢ Criteria for successful project financing

Advantages of Project Finance

➢ Risk Allocation: Risks are shared among participants, reducing the burden on individual parties
➢ Limited Recourse: Lenders' claims are limited to project assets, minimizing sponsors' liability
➢ Financial Structuring: Tailored financial arrangements optimize capital structure and improve project viability
➢ Tax Efficiency: Tax benefits and incentives may be available for certain projects
➢ Independent Entity: Projects operate as separate entities, protecting sponsors from bankruptcy risks

Key Participants in Project Finance and their roles and responsibilities:

➢ Sponsors – rationale/objectives
➢ Lenders - criteria
➢ Contractors - Objectives
➢ Government Agencies
➢ Equity Investors – Objectives: Risk & Return / Cost of Equity

Project Finance Process and Life Cycle:

➢ Project Identification and Feasibility Study
➢ The Project Finance Teams and Advisors
➢ Project Information Memorandum (PIM)
➢ Negotiation and Structuring
➢ Financial Arrangement and Syndication
➢ Construction and Implementation
➢ Operation and Maintenance
➢ Repayment and Divestment

Risk Management in Project Finance Risk Analysis

➢ Risk Categories:

❖ Commercial
❖ Construction/ Completion
❖ Operational
❖ Technical
❖ Financial
❖ Political

Risk mitigation strategies

➢ Risk Allocation techniques – The Project Finance contractual framework
➢ Project Risk issues in specific industry sectors:

❖ Power
❖ Oil & Gas
❖ Water & Waste
❖ Transport
❖ Mining
❖ Telecommunications
❖ PPP and PFI Projects
❖ Sectors to avo

➢ Risk mitigation techniques:

❖ Sponsor support & Guarantees
❖ Financial Analysis and Structuring
❖ Use of insurance
❖ Due Diligence

➢ Key Financial Ratios:

❖ Debt Service Cover Ratio
❖ Loan Life PV Ratio
❖ Reserve Life PV Ratio
❖ Reserve ‘Tail’

Project Finance: Financial Modelling

➢ Overview of financial modelling techniques
➢ Best Practice Approach to Financial Modelling
➢ Project Finance Spread Sheets
➢ Key EXCEL functions
➢ Modelling Assumptions

Using Financial Models for Analysis project

➢ Determining Debt Capacity
➢ Calculating Liquidated damages/overrun/retention requirements
➢ Break Even Analysis
➢ Key Ratio Targets
➢ IRR/NPV valuation analyses

Project Finance Documentation

➢ List of Basic financing Documents
➢ Term Sheets
➢ Key Clauses/Covenants: Payment Waterfall / Cash Sweeps
➢ Security Documents
➢ Direct Agreements
➢ Inter-Creditor Agreement

Training Date: 25 & 26 March 2024

Training Fee: R12 500 per person excl VAT

Course Outline: Click here



The outline above acts a guide to the topics to be covered in the course/workshop and may be presented in the actual course / workshop in a different order as to the one indicated above. Any major changes to the outline or subject matter of the course /workshop will be advised to all prospective participants in advance.