Project Finance: Applications and Insights to Emerging Markets Infrastructure

ISBN-13: 9781119642466 / Angielski / Twarda / 2020 / 224 str.

Paul Clifford

Spis treści

Preface xi Acknowledgments xv Chapter 1 Principles and Application of Project Finance 1 Origins and History of Project Finance 1 Why Sponsors Use Project Finance 2 Project Finance--Asset Class Performance 4 Global Infrastructure Outlook 9 The Infrastructure Gap in Emerging Markets 12 Focus--Asia Infrastructure Needs 13 Endnotes 14 Chapter 2 Project Finance--Risk Analysis and Mitigation 17 Commercial versus Contract Viability 19 Sponsor Risk 19 Political Risk 21 Construction and Completion Risk 22 Operation and Maintenance Risk 25 Supply Risks 26 Reserve Risk 27 Sales/Offtake Risk 27 Approvals and Permits 30 Social and Environmental Considerations 30 Financial Risks 31 Force Majeure Risk 32 Case Study: Mozal Aluminum Project, Mozambique 33 Endnotes 37 Chapter 3 Project Finance Agreements and Loan Documentation 39 Construction Contracts in Project Finance 41 Operations and Maintenance Contracts in Project Finance 42 Offtake Contracts/Concession Agreements 42 Supply Contracts 43 Project Finance Loan Documentation 44 Key Lender Protection Mechanisms and Strategies for Negotiating Finance Agreements 51 Case Study: Samba Drillship Oil and Gas Project, Brazil 52 Chapter 4 Risks and Challenges of Project Financing in Emerging Markets 61 Track Record of Project Finance in Emerging Markets--The Asian IPP Experience 62 Currency Mismatch--Lessons Learned from the Asian Currency Crisis 63 How the Asian Currency Crisis Transformed the Approach to Project Finance 65 Role of Multilateral, Bilateral Development Banks, and Export Credit Agencies 68 Stakeholder Alignment Issues 71 Mitigating Political and Sovereign Risks 71 Case Study: Dabhol Power Project, India 72 Endnotes 80 Chapter 5 Sources of Financing for Emerging Markets 81 Multilateral Development Banks (MDBs) 84 Bilateral Development Banks (BDBs) 85 Export Credit Agencies (ECAs) 85 Commercial Banks 87 Political Risk Insurance Market--Breach of Contract and Non-Honoring of Financial Guarantees 88 Project Bonds 89 Equipment Suppliers and Financing 90 Institutional Lenders (Insurance Companies, Infrastructure Funds, Pension Funds, Private Equity, and so forth) 91 Strategies for Multi-Sourced Financing in Emerging Markets 91 Case Study: Nam Theun 2 Hydro Project, Laos 92 Endnotes 99 Chapter 6 Financial Structuring and Debt Sizing 101 The Borrower/Sponsor Objectives 103 Lenders' Objectives 104 Debt Sizing and Sculpting 104 Financial Structuring--Debt Sizing and Loan Amortization 106 Lender Ratios for Debt Calibration and Stress Testing 110 Cash Traps and Sweeps 110 Case Study: Sabine Pass LNG Project and USA-Asia Energy Flows 112 Endnotes 117 Chapter 7 Environmental and Social Governance (ESG) 119 Sustainable Infrastructure Project Finance and Investing 120 Equator Principles 121 Multilateral Development Banks and ESG Frameworks 124 IFC Impact Investing Principles 127 Green Bonds 129 Sustainability Project Financing and UN Social Development Goals (SDGs) 131 Unlocking Institutional Capital to Meet Emerging Market SDGs 134 Case Study: Manzanillo Container Port Terminal Project, Mexico 136 Endnotes 141 Chapter 8 Emerging Markets Project Finance Bonds and Local Capital Markets 143 Project Bonds versus Project Loans 145 Project Bonds Investor Base and Market Liquidity 151 Local Currency Project Bonds and Partial Credit Guarantees/Insurance Wraps 154 Case Study: Project Bond Case Study--Mong Duong 2 Power Project, Vietnam 155 Endnotes 159 Chapter 9 China's Belt and Road Initiative 161 Background and Scope of the Belt and Road Initiative 161 China's Financing Strategy for BRI Infrastructure Development 170 Emergence of New Multilateral Development Banks--Focus on the Asia Infrastructure Investment Bank 172 Endnotes 174 Chapter 10 Project Finance Market Developments and Finance Structures 177 Mini-Perm Financing Structures 177 Back-Levered Financings for Renewable Energy Projects 180 Infrastructure Guarantee Products--Bond and Private Capital Credit Enhancement 182 Endnotes 187 Bibliography 189 Index 195

O autorze

PAUL D. CLIFFORD is Adjunct Professor at Columbia Business School. He also teaches at The City University of New York. He is a consultant for in-house programs at international banks and private sector energy companies. Formerly, he was Director of Project Finance for Standard Chartered PLC and ANZ Bank.