Project Finance: Structuring, Valuation and Risk Management for Major Projects (Management for Professionals)

✍ Scribed by B Rajesh Kumar

• Publisher: Springer
• Year: 2022
• Tongue: English
• Leaves: 321
• Category: Library

✦ Synopsis

Large projects are defining moments for companies and countries. When large projects succeed, they can dramatically improve the social and economic conditions in a region. This book focuses on major aspects of the world’s largest infrastructural, industrial and public service projects through the lens of structuring, valuing, managing risk and financing projects. The book analyses and discuss large projects in government, private and public and private partnership. The author sheds light into the attributes of project finance which have unique structural elements. The book focuses on case studies related to 50 mega projects which includes infrastructural projects, energy related projects, industrial projects, roads, ports and bridges among others. This book covers both the theoretical aspects of financing of mega projects and the practical applications by including case studies of the world’s largest projects in terms of value.

✦ Table of Contents

Project Finance
Preface
Acknowledgments
Contents
1: Trends in Infrastructure Industry
1.1 Sustainability in Infrastructure Industry
1.2 Global Trends in Infrastructure financing
1.3 Infrastructural Developments in Different Regions
1.4 Sectoral Trends
1.5 Infrastructure Financing and Role of Institutional Investors
1.6 Role of Private Sector in Infrastructure Development
1.7 Private Infrastructure Finance in Europe
1.8 Sources of Infrastructure Financing
1.8.1 Debt Finance
1.8.2 Sources of Capital-Equity
1.9 Alternate Sources of Financing: Institutional Investors
1.10 Superannuation Funds/Insurers
1.11 Challenges for Infrastructure Investments by Institutional Investors
1.12 Impact of Global Financial Crisis 2008 on Infrastructure Financing
1.13 Impact of Covid 19 on Infrastructure Industry
1.14 Megatrends Shaping Infrastructure Industry: A Reflection
1.15 Classification of Infrastructure
1.16 Listed Infrastructure Equity Financing
1.17 Infrastructure Funds
1.18 Infrastructure Investors
1.19 Cofunding in Infrastructure Projects
1.20 Alternate Procurement Mechanisms in Infrastructure Projects
1.21 Public Private Partnership (PPP): Forms
1.22 Mega Projects Under PPP
1.23 Infrastructure Investment in Gulf
1.24 History of Project Finance
1.25 Characteristics of Project Finance
1.26 Private Partnership in Infrastructure (PPI) Statistics
1.27 Infrastructure Finance League Statistics
1.28 Flagship Projects in Transportation Sector
1.29 Suez Canal
1.30 Panama Canal
1.31 Channel Tunnel
1.32 Belt and Road Initiative
1.33 Resund Bridge
1.34 Vasco da Gama Bridge (Portugal)
References
Further Reading
2: Infrastructure Financing Instruments
2.1 Challenges of Infrastructure Financing
2.2 Financing Instruments and Channels
2.3 Infrastructure Project Finance
2.4 Project Mezzanine Finance
2.5 Project Equity Finance
2.6 Corporate Balance Sheet Finance
2.7 Hybrid Instruments
2.8 Equity Instruments
2.9 Market Vehicles
2.10 Bond Market Debt Instruments
2.11 Debt Instruments: Syndicated Loans and Bank Loans
2.12 Corporate Bonds
2.13 Euro Marketable Securities
2.14 Other Innovative Bonds
2.15 Project Bonds
2.16 Green Bonds
2.17 Islamic or Sukuk Bonds
2.18 Securitization and Asset Backed Securities
2.19 Debt Funds
2.20 Direct Lending and Co Investment Platforms
2.21 Mezzanine Funds
2.22 Convertible Bonds and Preferred Equity
2.23 Listed Infrastructure Firms
2.24 Listed Infrastructure Funds
2.25 Yieldcos
2.26 Specialized Equity Instruments
2.27 Direct Equity Investment in Unlisted Firms and Co Investment Platforms
2.28 Leasing
2.29 Standardized Contracts
2.30 Aggregation
2.31 Securitization
2.32 Public Finance and Its Role in Infrastructural Development
2.33 Export Credit Agencies
2.34 World Bank Group
2.35 European Bank for Reconstruction and Development (EBRD)
2.36 European Investment Bank (EIB)
2.37 Asian Development Bank (ADB)
2.38 African Development Bank (AfDB)
2.39 Inter-American Development Bank (IDB)
2.40 Common Wealth Development Corporation (CDC)
References
Further Reading
3: Risks Inherent in Project Finance and Its Mitigation
3.1 Types of Risk
3.1.1 Construction Risk
3.1.2 Political and Regulatory Risk
3.1.3 Policy or Regulatory Risk
3.1.4 Macroeconomic or Business Risks
3.1.5 Currency Risk
3.1.6 Liquidity Risks
3.1.7 Technical Risk
3.1.8 Completion Risk
3.1.9 Operation Risk
3.1.10 Market Risk
3.1.11 Reserve/Production Risk
3.1.12 Supply Risk
3.1.13 Technology Risk
3.1.14 Revenue Risk
3.1.15 Obsolescence Risk
3.1.16 Industry Risks
3.1.17 Force Majeure or Event Risks
3.1.18 Counter Party Risk
3.1.19 Legal and Structural Risks
3.1.20 Refinancing Risk
3.1.21 Resource Risk
3.2 Risk Mitigation
3.3 Financial Risk Mitigation Instruments-Guarantees
3.4 Direct Guarantees
3.5 Different Forms of Guarantees
3.6 Management Agreements
3.7 Equity Contribution Agreements
3.8 Collateral Warranties
3.9 Direct Agreements
3.10 Government Support Agreement
3.11 Comfort Letters
3.12 Public Sector Guarantees
3.13 Government Guarantee
3.14 Alternatives to Government Guarantees
3.15 Private Sector Guarantees and Insurance
3.16 Project Insurance
3.17 Political Risk Insurance
3.18 Partial Risk Guarantee
3.19 Partial Credit Guarantee
3.20 Export Credit Guarantee
3.21 Currency Risk Mitigation Instruments: Derivative Contracts
3.22 Currency Risk Guarantee Fund
3.23 Local Currency Lending
3.24 Liquidity Risk mitigation Instruments-Internal Techniques
3.25 Liquidity Risk Mitigation Instruments: External Liquidity Techniques
3.26 Liquidity Guarantee
3.27 Put Options
3.28 Resource Risk Mitigation
3.29 Grants
3.29.1 Convertible Grants
3.29.2 Guarantee Funds
3.29.3 Exploration Insurance
3.29.4 Portfolio Guarantees
3.29.5 Advance Payment Contracts
3.30 Availability Payments
3.30.1 Offtake Contracts
3.30.2 Capital Financing
3.30.3 Grants and Taxation
3.30.4 Designing Security Arrangements for Projects
3.31 Completion Agreement
3.32 Concession Agreement
3.33 Construction Agreement
3.34 Operating and Maintenance Agreements
3.35 Performance Bonds
3.36 Fuel Supply Agreement
3.37 Sales/Offtake Agreement
3.37.1 Throughput Agreement
3.37.2 Take if Needed Contracts
3.37.3 Put or Pay Contracts
References
4: Structuring and Implementation of the Project
4.1 Stakeholders in Project Financing
4.2 Project Documents
4.3 Build Operate Transfer Model
4.4 Forward Purchase Model
4.5 Borrowing Base Model
4.5.1 Issues in Project Finance Loan Documentation
4.6 Completion Issues
Further Reading
5: Case 1: The Chuo Shinkansen Project, Japan
Further Reading
6: Case 2: Developing the World´s Largest Passenger Aircraft-Airbus A3XX
6.1 Reflections on Airbus A3XX
6.2 Financing the Project
6.3 Project Features
6.4 Risks Involved in the Project
6.5 Risk Mitigation Strategy
6.6 Delivery
6.7 Challenges for A3XX
Further Reading
7: Case 3: South North Water Transfer Project China
7.1 Project Highlights in Different Routes
7.2 Financing the Project
7.3 Risks and Mitigation Strategies for SNWT Project
7.4 Project Structuring
7.5 Project Status
Further Reading
8: Case 4: Dubailand Project
8.1 Retail and Entertainment World
8.2 Themed Leisure and Vacation World
8.3 Eco Tourism World
8.4 Sports and Outdoor World
8.5 Downtown
8.6 Strategic Alliances
8.7 Cancelled Projects
Further Reading
9: Case 5: International Space Station
Space Station Facts
9.1 Cost of the Project
9.2 Structuring of the Project
Further Reading
10: Case 6: Al Maktoum International Airport
10.1 Financing of the Project
10.2 Risks Perspectives
Further Reading
11: Case 7: California High Speed Rail Project
11.1 Economic and Social Impact of the Project
11.2 Program Expenditure
11.3 Sources of Financing
11.4 Sustainability Initiatives
11.5 Major Milestones
11.6 Risk Inherent in the High Speed Rail Project
11.7 Risk Mitigation Strategy
Further Reading
12: Case 8: London Cross Rail Project
12.1 Features of the Project
12.2 Sources of Financing
12.3 Social and Economic Impact of the Project
12.4 Sustainability Initiatives of the Project
12.5 Project Progress
12.6 Risks in the Project
Further Reading
13: Case 9: Beijing Daxing International Airport
13.1 Structuring of the Daxing Airport
13.2 Construction Cost
13.3 Financing
13.4 Development Fund
13.5 Economic Impact
13.6 Potential Risks
Further Reading
14: Case: 10 Jubail II Industrial City
14.1 Industrial Incentives
14.2 Green Initiatives
14.3 Challenges and Risks
14.4 Status Quo
14.5 Economic Impact
Further Reading
15: Case 11: Hong Kong Zhuhai Macao Bridge (HZMB)
15.1 Hong Kong Link Road (HKLR)
15.2 Hong Kong Port
15.3 Financing of the Project
15.4 Economic Impact of the Project
15.5 Risks Inherent in the Project
Further Reading
16: Case 12: Gotthard Base Tunnel (GBT)
16.1 Cost and Financing of the Project
16.2 Economic Impact
16.3 Structuring of the Project
16.4 Risk Management of the Project
Further Reading
17: Case 13: Channel Tunnel UK
17.1 Cost and Financing
17.2 Structuring
17.3 Risks Mitigation
17.4 Impact of the Project
17.5 Problems Faced by the Project
Further Reading
18: Case 14: Doha Metro
18.1 Structuring
18.2 Financing
18.3 Significance of the Project
18.4 Risks Involved in the Project
18.5 Main Contractors of the Project
Further Reading
19: Case 15: Panama Canal Expansion
19.1 Expansion of the Project
19.2 Sources of Financing
19.3 Impact of the Project
19.4 Risks Involved in the Project
Further Reading
20: Case 16: Three Gorges Dam-The World´s Largest Hydroelectric Plant
20.1 Funding and Costs of the Project
20.2 Significance of the Project
20.3 Challenges and Risk
Further Reading
21: Case 17: One World Trade Center
21.1 Cost of Funding
21.2 Risks and Challenges
21.3 Ownership
Further Reading
22: Case 18: Making of the Tallest Building-Burj Khalifa
22.1 Project Finance
22.2 Significance of the Project
Further Reading
23: Case 19: Shanghai World Financial Center
23.1 Construction
23.2 Sustainability Initiatives
23.3 Significance of the Project
Further Reading
24: Case 20: Dolphin Gas Project
24.1 Significance of the Project
24.2 Financing
24.3 Major Risks for the Project
Further Reading
25: Case 21: Bhadla Solar Park
25.1 Financing
25.2 Contracts for the Project
25.3 Impact of the Project
25.4 Feasibility of Solar Power
25.5 Challenges for the Project
Further Reading
26: Case 22: Tengger Desert Solar Park China
Further Reading
27: Case 23: Millau Viaduct-The Tallest Bridge, France
27.1 Financing and Construction Cost
27.2 Risks for the Project
27.3 Economic Benefits of the Project
Further Reading
28: Case 24: Jiaozhou Bay Bridge
28.1 Financing Cost
28.2 Structuring of the Project
28.3 Economic Benefits
Further Reading
29: Case 25: Trans-Siberian Railway
29.1 Economic Benefits
29.2 Sources of Financing
29.3 Challenges of the Project
29.4 New Developments
Further Reading
30: Case 26: Pan-American Highway
30.1 Financing
30.2 Benefits of the Project
30.3 Risks Attributed to the Project
Further Reading
31: Case 27: Port of Shanghai
31.1 Yangshan Deepwater Port
31.1.1 Financing of the Project
31.1.2 Project Challenges
31.1.3 Future Milestones
Further Reading
32: Case 28: Sakhalin Project-II
32.1 Environmental Safety
32.2 Risks and Challenges of the Project
32.3 Economic and Social Significance of the Project
32.4 Structuring of the Project
Further Reading
33: Case 29: Ichthys LNG Project
33.1 Risks Involved for the Project
33.2 Economic Impact
33.3 Contractual Agreements
33.4 Health Safety and Environment Measures
Further Reading
34: Case 30: Kashagan Oil Field Development Project
34.1 Main Contractors
34.2 Production Sharing Agreement (PSA)
34.3 Risks and Challenges
Further Reading
35: Case 31: Barzan Gas Project
35.1 Financing the Project
35.2 Contractors for the Project
35.3 Project Structuring
35.4 Risks and Challenges
35.5 Economic Contribution of the Project
Further Reading
36: Case 32: Australian Japan Cable
36.1 Financing of the Project
36.2 Opportunities, Risks and Challenges
36.3 Project Ownership
Further Reading
37: Case 33: Addis Ababa-Djibouti Railway
37.1 Highlights of the Project
37.2 Economic Significance of the Project
37.3 Financing of the Project
37.4 Significance of the Project
37.5 Risk Mitigation Strategy
Further Reading
38: Case 34: Port Mann Bridge Vancouver
38.1 Project Agreement
38.2 Project Benefits
38.3 Environmental Assessment
38.4 Risk Mitigation
Further Reading
39: Case 35: Chernobyl New Safe Confinement Project
39.1 Financing
Further Reading
40: Case 36: Kashiwazaki Kariwa Nuclear Project, Japan
40.1 Structuring and Financing of the Project
Further Reading
41: Case 37: Kudankulam Nuclear Power Plant, India
41.1 Financing Cost
41.2 Pricing of Nuclear Power
41.3 Power Distribution
41.4 Risks and Its Mitigation
41.5 Contractors for the Project
Further Reading
42: Case 38: Boundary Dam Power Station
Further Reading
43: Case 39: Boeing 787 Dreamliner Project
43.1 Scenario During the Project Development
43.2 Production and Development Support
43.3 Financing Cost and Revenues
43.4 Risks Inherent in the Project
Further Reading
44: Case 40: Shanghai Metro System
44.1 Project Milestones
44.2 Infrastructural Details
44.3 Financing
44.4 Structuring of the Project
44.5 Challenges
Further Reading
45: Case 41: São Francisco River Basin Project
45.1 Challenges and Environmental Impact
Further Reading
46: Case 42: Kazan Smart City Project
46.1 Zones of the City
Further Reading
47: Case 43: Masdar City
47.1 Initiatives
Further Reading
48: Case 44: Delhi Mumbai Industrial Corridor Project
48.1 Project Details
Further Reading
49: Case 45: Golden Quadrilateral Highway, India
49.1 Financing of the Project
49.2 Impact of the Project
Further Reading
50: Case 46: Hong Kong Disney Land Project
50.1 Economic Implications
50.2 Environmental Issues
Further Reading
51: Case 47: Jamnagar Refinery Project, India
51.1 Ownership Structure and Financing
Further Readings
52: Case 48: Big Dig Project
52.1 Benefits of the Project
52.2 Project Financing Cost
Further Reading
53: Case 49: North-South Corridor Road/Rail Project
53.1 Financing of the Project
53.2 Establishment of TTA
Further Reading
54: Case 50: Great Man Made River Water Supply Project, Libya
54.1 Significance of the Project
Further Reading