markets and companies law - unibg and companies la… · markets and companies law principles of...
TRANSCRIPT
![Page 1: Markets and Companies Law - Unibg and Companies La… · Markets and Companies Law Principles of Project Financing - 2017-2018 1. What is Project Finance • Definitions and terms](https://reader034.vdocuments.net/reader034/viewer/2022042318/5f070c567e708231d41b0a70/html5/thumbnails/1.jpg)
Markets and Companies LawPrinciples of Project Financing - 2017-2018
1
![Page 2: Markets and Companies Law - Unibg and Companies La… · Markets and Companies Law Principles of Project Financing - 2017-2018 1. What is Project Finance • Definitions and terms](https://reader034.vdocuments.net/reader034/viewer/2022042318/5f070c567e708231d41b0a70/html5/thumbnails/2.jpg)
What is Project Finance
• Definitions and terms• The basic components of project finance• Project finance vs. balance sheet or asset-based
finance• Non-recourse vs. limited recourse project finance• Other structures
2
![Page 3: Markets and Companies Law - Unibg and Companies La… · Markets and Companies Law Principles of Project Financing - 2017-2018 1. What is Project Finance • Definitions and terms](https://reader034.vdocuments.net/reader034/viewer/2022042318/5f070c567e708231d41b0a70/html5/thumbnails/3.jpg)
Why Project Finance
• Uses of project finance• Advantages• Disadvantages• International project finance; does location matter?• Does project finance suit any projects?• The concept of bankability
3
![Page 4: Markets and Companies Law - Unibg and Companies La… · Markets and Companies Law Principles of Project Financing - 2017-2018 1. What is Project Finance • Definitions and terms](https://reader034.vdocuments.net/reader034/viewer/2022042318/5f070c567e708231d41b0a70/html5/thumbnails/4.jpg)
Project Finance participants
• Project sponsors• Project company/ies• Borrowing entity/ies• The lenders, banks and bondholders• Any banks?• The “agencies”, international vs. domestic
4
![Page 5: Markets and Companies Law - Unibg and Companies La… · Markets and Companies Law Principles of Project Financing - 2017-2018 1. What is Project Finance • Definitions and terms](https://reader034.vdocuments.net/reader034/viewer/2022042318/5f070c567e708231d41b0a70/html5/thumbnails/5.jpg)
Project Finance participants - continued
• The project chain; contractors, suppliers, output purchasers
• Operation and mantainance• The advisors: technical experts, financial advisors,
legal experts• Insurers• The host country government
5
![Page 6: Markets and Companies Law - Unibg and Companies La… · Markets and Companies Law Principles of Project Financing - 2017-2018 1. What is Project Finance • Definitions and terms](https://reader034.vdocuments.net/reader034/viewer/2022042318/5f070c567e708231d41b0a70/html5/thumbnails/6.jpg)
Project Finance structures• Different financial structures• Commercial loan financing• Export credit financing• Lease financing• Bond financing• “Build-own-transfer”• Co-financing• Production payments and forward purchase
agreements
6
![Page 7: Markets and Companies Law - Unibg and Companies La… · Markets and Companies Law Principles of Project Financing - 2017-2018 1. What is Project Finance • Definitions and terms](https://reader034.vdocuments.net/reader034/viewer/2022042318/5f070c567e708231d41b0a70/html5/thumbnails/7.jpg)
Project Finance Ownership Structure
• General considerations• The pre-development stage• Determining a suitable ownership structure• Sponsors and parent companies• The “special purpose” company• The role of the host country
7
![Page 8: Markets and Companies Law - Unibg and Companies La… · Markets and Companies Law Principles of Project Financing - 2017-2018 1. What is Project Finance • Definitions and terms](https://reader034.vdocuments.net/reader034/viewer/2022042318/5f070c567e708231d41b0a70/html5/thumbnails/8.jpg)
Project Finance Ownership Structure -continued
• The form for a suitable structure• Corporation• General and limited partnerships• Joint ventures• Consortia and temporary arrangements• European Economic Interest Group (EEIG) • A magic word: flexibility
8
![Page 9: Markets and Companies Law - Unibg and Companies La… · Markets and Companies Law Principles of Project Financing - 2017-2018 1. What is Project Finance • Definitions and terms](https://reader034.vdocuments.net/reader034/viewer/2022042318/5f070c567e708231d41b0a70/html5/thumbnails/9.jpg)
Project Finance Ownership Structure -continued
• Implementing the ownership structure• Legal formats and contract flexibility• Is there a law of project finance?
9
![Page 10: Markets and Companies Law - Unibg and Companies La… · Markets and Companies Law Principles of Project Financing - 2017-2018 1. What is Project Finance • Definitions and terms](https://reader034.vdocuments.net/reader034/viewer/2022042318/5f070c567e708231d41b0a70/html5/thumbnails/10.jpg)
Risky business?
• Risk identification, allocation and mitigation• Perspectives and objectives• The risk matrix• Cross-border risks• Legal risk• Commercial risk• Force majeur and hardship clauses
10
![Page 11: Markets and Companies Law - Unibg and Companies La… · Markets and Companies Law Principles of Project Financing - 2017-2018 1. What is Project Finance • Definitions and terms](https://reader034.vdocuments.net/reader034/viewer/2022042318/5f070c567e708231d41b0a70/html5/thumbnails/11.jpg)
The Feasibility of a Project Finance
• The feasibility study – purpose and contents• Host country environment• Economic feasibility• Environmental feasibility• Regulation• Role of agencies (World Bank, OECD, IFC)
11
![Page 12: Markets and Companies Law - Unibg and Companies La… · Markets and Companies Law Principles of Project Financing - 2017-2018 1. What is Project Finance • Definitions and terms](https://reader034.vdocuments.net/reader034/viewer/2022042318/5f070c567e708231d41b0a70/html5/thumbnails/12.jpg)
Project Finance Documentation• Contracts are king• Types of documents• Non recourse provisions• Protection of sponsors vs. lending community
requirements – bankability• Take-or-pay and similar clauses• Transnational contracting• Internationalization of contracts• When things go wrong
12
![Page 13: Markets and Companies Law - Unibg and Companies La… · Markets and Companies Law Principles of Project Financing - 2017-2018 1. What is Project Finance • Definitions and terms](https://reader034.vdocuments.net/reader034/viewer/2022042318/5f070c567e708231d41b0a70/html5/thumbnails/13.jpg)
Representation & Warranties in Project Finance Contracts• Role and purpose• Mechanics of representation and warranties• Legal framework: reps & wars vs. guarantee
obligations• Review of sample provisions
13
![Page 14: Markets and Companies Law - Unibg and Companies La… · Markets and Companies Law Principles of Project Financing - 2017-2018 1. What is Project Finance • Definitions and terms](https://reader034.vdocuments.net/reader034/viewer/2022042318/5f070c567e708231d41b0a70/html5/thumbnails/14.jpg)
Host Country Agreements in Project Finance• The role of the host country• Preliminary agreements and government approvals• Tendering processes – how do they fit with project
finance structures?• Concessions and licenses• Implementation agreements• Infrastructures and environment• Sovereign immunity and the “act of State doctrine”• What if the government changes?
14