Project Finance - from Seed Finance to pre IPO Funding

Advance Project Finance - Structuring Risk

Building the model:

- assumptions;
- construction;
- insurance;
- taxes;
- depreciation;
- financings;
- income statements;
- balance sheets;
- cash flow;
- retained earnings;
- equity returns;
- coverage ratios and
- present values.
- off-taker purchase;
- capital recovery;
- unit prices;
- market fundamentals;
- DCF;
- NPV;
- WACC;
- CAPM; and
- IRR.

- due diligence of analyzing the project's ability to support interest rates and gearing;
- downside, base, and upside cases;
- use the model to price and negotiate the deal.

PROJECT FINANCE TRANSACTION AGREEMENTS

• Engineering, Procurement and Construction (EPC) Contract: - between the Project Company & the Engineering Firm.
• Operations and Maintenance (O & M) Agreement: - between the Operations Contractor and the Project Company, obligates the Operator to operate and maintain the project.
• Shareholders Agreement: - governs the business relationship of the equity partners
• Inter-creditor Agreement: - an agreement between lenders or class of lenders that describes the rights and obligations in the event of default.
• Supply Agreement: - agreement between the supplier of a critical key input and the Project Company (e.g. agreement between a coal supplier and a power station)
• Purchase Agreement: - agreement between the major user of the project output and the Project Company (e.g. agreement between a metropolitan council and a power station)

Project start ups with USP and IP either as SPV's of a bigger concern or with strategic partners bringing project management skills