Overview

This course follows on from our Introduction to Project Finance module. Whilst it is not necessary to attend the Introductory course first, it is advisable. We will examine some of the financial-structuring issues likely to arise once the commercial fundamentals and risks of the project have been reviewed as set out in the 1^st module.

This course will teach you everything you need to know about financial structuring of Public Private Partnerships (PPPs). You will learn how the different elements of the financial jigsaw are fitted together to create a financing plan, and how to pitch your financing plan perfectly to potential sponsors.

Why Should an Individual Attend?

Gain an understanding of financial analysis, procurement and investment in PPPs, by both public and private sector.

Program Outline

Pillar 1: Overview of Commercial Feasibility

• Designing the Technical Requirements
• Project Design & Construction Requirements
• Performance Requirements & Operations and Maintenance Specifications
• Other Technical Assessment-Related Matters and Preparatory Activities
• Consideration of Risk in the Commercial Feasibility
• Estimating Risk-Adjusted Costs
• Key Points on Project Scope, Technical Requirements and Cost Assessment

Pillar 2: Preliminary Structure of the Financial Mechanism

• Designing a Preliminary Structure of the Financial Mechanism
• Revenue Regime
• Payment Mechanism
• Preliminary Risk Allocation
• Developing the Financial Model
• Sources of Information
• Macroeconomic Assumptions
• Estimates of Capital Expenditures
• Operating Costs and Reinvestments

Pillar 3: Financial Structure of the Project Company

• Alternatives to Commercial Banks
• Revenues
• Accounting Issues
• Issues Considered in Defining the Contract Term
• Cash Flow
• Base Case, Sensitivities and Scenarios

Pillar 4: Assessing the technical and commercial feasibilities

• Assessing the Technical Feasibility
• Technical Risks Associated with Infrastructure Initiatives
• Assessing the Commercial Feasibility
• Commercial Feasibility – Lenders’ Perspective
• Commercial Feasibility – Investors’ Perspective
• Factors that Affect Required Rate of Return
• Other Decision Drivers for Investors Analysing a Project’s Cash Flow
• Assessing Commercial Feasibility
• Outputs of the Commercial Feasibility Assessment
• Assessing Fiscal Feasibility

Pillar 5: Value for Money

• Value for Money Assessment
• Quantitative Value for Money Analysis

Pillar 6: Financial Structuring

• Financial Structuring (from the Public Perspective)
• Co-Financing
• Grant Financing
• Contract Development
• Hard or Soft Public Agency Loans
• Equity Participation by the Government
• Other Ways to Increase Financial Feasibility and Affordability

Pillar 7: Revenue Regimes in PPPs

• User-Pays Financial Structuring Matters
• Volume-Linked Payment Mechanisms
• Performance Correction
• Calibrating the Payment Mechanism
• Composition of the Payment in a Unitary Payment and Time Pro Rata
• Indexing the Payment
• Frequency of Payments and the Payment Calculation Process

Pillar 8: Dealing with Risks

• Risk Allocation versus Risk Structuring
• Risk Strategy – Public & Private Perspective
• Risk Matrix
• Quantitative Assessment and Appraisal
• Mitigation Measures
• Deciding on Risk Allocation 
• Contractual Categories of Risks
• Risks During the Design and Construction Phase
• Risks During the Operating Phase
• Calculating the Compensation

Who Should Attend?

• Government and real estate officials
• Developers
• Architects
• Contractors
• Consultants
• Attorneys
• Engineers
• Other professionals involved in the public/private finance, development, & construction.