INFRASTRUCTURE FINANCE AND PPP

INFRASTRUCTURE FINANCE AND PPP

INFRASTRUCTURE FINANCE AND PPP (Course Director: Meg Osius) Program Overview and Objectives In this three-day program participants will become familiar with the wide array of models for Public Private Partnerships (PPP) designed to link public sector financial resources and accountability with private sector discipline, expertise, and capital. Using examples from the energy, transportation, social services, water, sanitation and other sectors, attendees will be brought up to date on the latest techniques and innovative approaches to PPP structuring and funding of projects. Program Approach At the program s core is a rapid paced discussion of key aspects of PPP projects designed to balance risk among various stakeholders, as well as meet policy objectives like value for money central to governmental decision-making. By its conclusion participants will be able to break project analysis into its component parts. They will have learned techniques for assembling market information, making qualitative judgments, and developing key agreements. Project cash flow forecasts based on Excel models will be explained and analyzed, including public sector comparators. Sessions also focus on the many sources of finance and risk support available for PPP projects. From bank markets and bond issuance to leasing and other foreign and local currency funding alternatives, discussion highlights differences in accessing various markets, disclosure requirements and typical investor concerns. Who Should Attend The course will be valuable to professionals in the following areas: Bankers/Investment Bankers /Financial Advisors Sponsors/Project Joint Venturers Project Developers Government/PPP Agencies Public Sector Managers Accountants/Taxation Advisers Share Market Analysts/Brokers Privatization Executives Company Treasurers/Directors Credit Committee Staff Rating Agencies Project Managers/Engineers Project Consultants 2018 2

INFRASTRUCTURE FINANCE AND PPP (Course Director: Meg Osius) Day 1: Overview of Public Private Partnership (PPP) Public Private Partnerships (PPP) Principles Different Structures and Degrees of Public vs Private Participation Contract Services: Operations and Maintenance (O&M) Leasing: Lease Develop Operate (LDO Design Build: DB, DBM, DBO, DBFO BOT, BOO Concessions Privatization Market evolution: Power Generation to Social Infrastructure Managing and Allocating Risks in PPP; Making a Deal Bankable Collecting Information: Macro and Micro Concerns Risk Allocation and Mitigation Techniques in PPP Developing a Specialized Matrix Analyzing Risk Assumptions (Shareholders, Construction, Operating and Maintenance, Financial, Political) Environmental Considerations Consultants in the PPP Process Financing Power Projects Market forces and the effect on electrical supply Fragmentation of electricity generation (Gencos/Transcos/Discos) Merchant power plants (MPPs) Case Study: Power Project Part 1 Renewable Power Risk allocation among various project participants developing and financing a gasfired power plant. Costs of Renewable Power vs. Traditional Fossil Fuel (LCOE) What is Driving the Investment? Government Incentives 2018 3

Quantitative Risk Analysis and Cashflow Forecasts Debt vs Equity and Key Measurements Probabilistic Modeling Testing Sensitivities Requirements of Creditors vs Investors Other Stakeholder Considerations Case Study: Power Project - Part 2 Testing the project's cash flows under varying scenarios with a cash-flow simulation model. What are acceptable DSCR levels? What kinds of returns do investors require? End of Day 1 2018 4

Day 2: PPP Tender Process Other Contractual Issues User Needs in Output Terms Private Sector Informational Requirements Identifying Bidders, Negotiating Strategies and Closing Regulatory Framework and Enforceability Policy Objectives of the Government Concessions and Licensing, Process and Oversight Value for Money and the Public Sector Comparator (PSC) Unitary Payments (UPs) Case-Example: Canada Line Rapid Transit PPP and Rapid Transit Projects. Phases of the selection process. Public Sector Comparator and risk assessment. Funding Roads and Other Transport Projects Different Structures and Degrees of Private Participation Long-term Concessions and Availability Arrangements Case-Study: Using DBFO Structuring for a Toll Road Project Participants will break into groups to evaluate the DBFO financing scheme for a toll road. They will assess the allocation of risks, and concession terms, and other contractual agreements. Sources of Funds and Credit Enhancement for PPP Using Bank Debt Club Deals, Syndications and Secondary Market Resale Term Sheets, Information Memoranda and Credit Agreements Conflict Resolution Special Consideration in Global Bond Issuance Sales Process, Covenants, Workout Considerations Role of the Rating Agencies Mono-line Insurers and Wraps Tapping Local Capital Markets Derivative Products for PPP 2018 5

Financing Ports and Airports Objectives Port Financing Compared to Airports Airport Checklist Case Study: Financing an Airport Goals of government and other stakeholders from the concessionaire to the contractor, operator and other stakeholders. Review of cash flow projections, project risks and their allocation through contracts. Proposed financing mix, and rating agency considerations. End of Day 2 2018 6

Day Three: Case Discussion Sources of Credit and Other Risk Support in PPP Projects Official Risk Enhancers and PPP ECAs and Development Banks Mono-line Insurers Case-Examples Special Features of Water Infrastructure PPP in Water and Sanitation Projects An Array of Structures Who are the Players? Investors and Creditors? Case Examples: Non-Revenue Water Case Study: Financing a Water Treatment Plant Participants will break into groups to prepare a case study concerned with the terms of a concession and financing for a municipal wastewater treatment plant. PPP and Social Infrastructure Financing Hospitals, Schools, Prisons, Others Sample Concessions and Contract Terms Risk Evaluation and Allocation Monitoring Requirements Case Example: Financing a Hospital Special considerations of social infrastructure. Construction considerations Interface between hard and soft operating costs. Cashflow and leverage ratios. Self-test Close of Program 2018 7

BIOGRAPHY Margaret ( Meg ) Osius advises a variety of corporate, private and development bank clients structuring green-field projects and facility upgrades in the oil, gas, power, telecom, transport and other infrastructure sectors. She also delivers executive-training sessions on international project finance and capital markets worldwide. Prior to establishing her own firm Ms. Osius was at JP Morgan Chase where she financed international projects and advised clients on risk management. Earlier in her career at Chase she had extensive experience with workout and distressed credit in International markets. Currently a director of British Caribbean Bank Ltd. and Waterloo Holdings Inc, previously Meg was Chair of the Technical Advisory Panel of the Public Private Infrastructure Advancement Fund (PPIAF). Ms. Osius has published articles in the business press and co-authored guides to international project finance, export finance and foreign exchange. She is the primary speaker in a video series addressing approaches to credit risk management and structured transactions in emerging markets created by the World Bank. She holds an M.B.A. from INSEAD and a B.A. degree from Princeton University and is a permanent member of the Council on Foreign Relations. 2018 8