Legal Issues in Project Finance & PPP

With the general downturn in the global economy, the American power crisis, the crash of the hi-tech industry and recent global events, many banks and developers are re-examining their project finance pipelines. China and the Gulf are leading the next wave of projects however. International Financial Institutions (IFIs) also continue to work in developing countries and Eastern European countries in transition. The trend is towards 'keeping it simple' using basic project financing techniques involving syndicated lending, sponsor support and a full security package. Bankability of project documentation remains crucial. COURSE OBJECTIVES: CLARIFIES the role of risk allocation in PPPs and Project Finance FOCUSES on the different projects documents involved INDENTIFIES key bankability issues ANALYZES key provisions of project loan agreements EXPLORES security, direct & sponsor support agreements EXPLAINS the role of International Financial Institutions WHO SHOULD ATTEND? In-house lawyers in banks and financial institutions In-house lawyers and financial officers of project sponsors Project finance and structured finance managers Project lenders and sponsors Bank officers responsible for evaluating or structuring projects Project finance
Day 1 Introduction What is Project Finance? What is PPP? Risk identification and allocation What are financing agreements? The role of the project documents Overview of what constitutes ‘project documents’ and their role in a project Lender’s perspectives as compared to sponsors and off takers The Concession/BOT/PPA Presentation of key issues of bankability in the agreement between the Grantor and the Special Purpose Vehicle, including: Different structures BOT, BTD, BOOT, DBFO, PPA, PPP, Concession The parties Site/existing assets Payment structures Construction/Operation Step-in rights Termination Dispute resolution Turnkey construction contract Presentation of turnkey construction contracts and key issues of bankability, including: Single point responsibility Fixed price Date certain Liquidated damages for delay and performance Termination Operation and maintenance agreements Presentation of key issues of bankability in O&M agreements Different structures available Guarantees Duration Limitation on liability WORKSHOP: THE PROJECT AGREEMENT Delegates will analyze provisions of a Project Agreement to identify key areas of bankability and risk allocation. Day 2 Dealing with international financial institutions Lenders of last resort/preferred creditors A loan & B loan Analyzing the loan agreement The term sheet Overview of the structure and content of a syndicated loan agreement Key project covenants Representations and warranties Affirmative and negative covenants Events of default WORKSHOP: ANALYZING A PROJECT LOAN AGREEMENT – Delegates will use a checklist of loan agreement provisions and they will analyze a project loan agreement. They will be required to form a position on major provisions. Examining the security documents Explaining the support agreements The significance of support agreements The sponsor's role Forms of support from sponsors Key provisions