Financing Power Projects in Asia

Master the use of Project Finance and other options for financing large scale projects in the Asian power sector

Attend this highly interactive three-day course to:

  • Evaluate the typical structures for debt financing options for a power project
  • Understand the motivations of key stakeholders in projects and implications for the financing approach including the government, lender and investor perspectives
  • Identify, evaluate and allocate key risks in financing Asian power projects
  • Assess the inherent and current political risks that are specific to projects in this region
  • Build your knowledge of practical application through case studies and exercises from real life Asian power projects
  • Learn from our highly experienced trainer with an extensive understanding of the Asian power sector to understand the key tools and techniques for Financing
  • Benefit from a highly experiential learning environment
  • Share current issues and challenges with colleagues from across the power industry

 

What is the programme about?

Securing finance for even the most well researched and robust power projects can be challenging. Understanding how to analyse the risks, structure the finance and where to look for it is vital for success. This highly practical 3-day programme is a must attend for anyone who understands the value of developing a robust financing plan to ensure long term viability.

Practical Power Cases, Exercises and Discussions. Sector specific deals and scenarios will be used throughout the programme to illustrate
the key learning points in practice, supported by the trainers unparalleled knowledge of the challenges and opportunities within this region.
 
  • Commercial Managers
  • Project Managers and Engineers
  • Corporate Treasury
  • Contractors
  • Lawyers and Other Professional Advisors
  • Investment Managers investing in project backed bonds
  • Personnel in banks in the following job roles working with companies in the power sector
  • Credit Risk Analysts in corporates involved in Project Finance
  • Credit Portfolio Management
  • Corporate Banking Relationship Managers
  • Origination Teams in Debt and Equity Capital Markets
  • Syndicated Loan Teams
  • Lawyers
  • Development Finance Institutions
  • Export Credit Agencies
  • Equipment Manufacturers

DAY 1

Introduction 

  • Why you should finance power projects in Asia with my organisation
  • Sources of finance for power projects: sovereign, SOE, equity, capital markets, bank debt, MLAs / ECAs
  • When to use which source of finance
  • Evolution of project finance generally into today’s sectors

Deal snapshot: IPM Eagle, global

  • Distinguishing features of project finance; concepts of limited recourse lending and risk allocation        
  • The power project finance market in Asia
  • Privatisation, single asset corporations and project finance

Deal snapshot: privatisation of the Singapore power generation market

  • Bond market characteristics
  • Similarities between project financing and Islamic financing

Deal snapshot: Manjung Island Energy, Malaysia

  • Project finance metrics
  • Sources of further information and opinion

Typical structures for power financings

  • Project agreements and financing agreements
  • Utility retaining responsibility for asset
  • Classic Independent Power Project (IPP)
  • Industrial user offtakers
  • Combined Heat & Power (CHP)
  • Merchant plants
  • Minemouth power plants
  • Integrated water & power plants
  • Renewables

Deal snapshot: Lopburi solar, Thailand

The deal life cycle

  • Inception: greenfield bid/unsolicited proposal, expansions, re-financings, acquisitions, privatisations
  • Bidding
  • Award
  • Negotiate financing
  • Due diligence
  • Syndication
  • Construction and operation
  • Repayment

Case studies: Philippines BOT Law Marubeni / Tepco purchase of Mirant Philippines portfolio


DAY 2

Risk Mitigation

Class discussion: Mundra UMPP, India

  • Completion of construction & Commercial Operations Date (COD)
  • Revenue price risk and pass through of fuel, O & M costs
  • Revenue payment risk and government support for SOE as offtaker
  • Fuel supply and reserves risk
  • Operating
  • Technical
  • Interest rates
  • Equity
  • Force majeure
  • Insurance
  • Environmental and reputational
  • Foreign exchange
  • Approvals
  • Tax and regulatory
  • Legal
  • Corruption
  • Political

Case study: Wayang Windu geothermal, Indonesia


Political Risk

Exercise in identification of political risk: Theun Hinboun expansion, Laos

  • The risks
  • Preemption
  • The mitigants
  • The players 

    - Multilaterals

    - Bilaterals

    - Private Insurers

  • Alternative dispute resolution
  • Mitigation benefits and policy issues


Project financing characteristics

  • Finance Agreements and the role of the term sheet in apportioning risk
  • Control of cash during construction
  • Achievement of Commercial Operations Date
  • Cash flow control waterfall during operations
  • Ratio definitions
  • Flexible payback of debt
  • Flexible returns on debt
  • Equity considerations
  • Project life tail
  • Credit enhancement
  • Lenders’ involvement in project
  • Dispute resolution
  • Default
  • Ancillary banking products
  • Nature of Sponsors
  • Accounting treatment by Sponsors


DAY 3

Case study: CBK Power, Philippines

Financing plan

  • Sources of finance and sufficiency of funding
  • Base and standby debt / equity facilities
  • Contingent equity
  • Tax effectiveness and leasing
  • Base Case cash flows
  • Sensitivities: single parameter, combination and break even

Case study: typical power cash flow model


Lender and investor agenda

  • Players
  • Spread of risk and portfolio considerations
  • Returns and hurdle rates over different time horizons

Goverment agenda

  • Ability to procure and finance itself
  • Appetite for Private Sector participation
  • Control of monopoly asset
  • Credit support for State Owned Enterprises
  • Support for individual projects via Viability Gap Funding, revenue collars, etc.
  • Powers of eminent domain
  • Restrictions on foreign nationals
  • Control of investor returns
  • Accounting treatment by Governments

Snapshot: Indonesia’s Fast Track programme versus IPPs

Project finance outomes

  • Commentary
  • Moody’s re project finance loans performance 1983 – 2010
  • Political climate around Asia

Case study: Paiton Energy

 

 

Course Categories

Testimonials for our Courses

“Well organised.”
 

Delivered by

Andrew Kinloch has been lead arranging and advising on complex structured, project and export fin

Dates & Locations



This course is only available as a custom course tailored for your business, contact us to discuss your requirements.