4500.17 - Project Financing Building Infrastructure Key...

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Project Financing Building Infrastructure Key Idea Projects with different risks Projects with different risks are likely to possess differing debt capacities with each project, therefore necessitating a separate financial structure.
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Core Concepts Projects with Projects with different risks are likely to possess differing debt capacities with each project, so need separate financial structure Key Attributes of Project Financing Risks hedged to maximum possible exten • Risks hedged to maximum possible extent • Project’s debt capacity fully utilized • Financial obligations tailored to match project’s cash flows Lenders have limited recours • Lenders have limited recourse
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Overview Criteria for succes • Criteria for success • Historical perspective • Overview of structured financing Obligations match project’s cash flows Participants exit sequentially Criteria for Success Size doesn’t matte • Size doesn t matter • Project financing works in many activities • Community of interest is crucial • Infrastructure is crucial
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Distribution by Size 50 41 71 34 47 24 11 20 8 $60-80 mil ion $80-100 mil ion $100-150 mil ion $150-200 mil ion $200-300 mil ion $300-400 mil ion $400-500 mil ion $500-999 mil ion $1 bil ion or more 284 111 95 0 50 100 150 200 250 300 under $20 mil ion $20-40 mil ion $40-60 mil ion Median size: $40 mil ion Activities: Project Financings Announced Jan. 1, 1981 through Dec. 31, 1995 Project Financings Announced Jan. 1, 1981 through Dec. 31, 1995 20 30 40 50 60 0 10 Project Financings Miscel aneous
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Electric Power Production 100% 20% 40% 60% 80% Smaller Corp Fortune 500 Corp Independent 0% Cogeneration Hydro Geothermal Solar Communities of Interest Cogeneration power production Cogeneration power production example: Seadrift Plant • Host site greater the productivity & less waste backup power • Utility company higher employment activity in its region greater planning flexibility • Simplified resolution of financial distress
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Communities of Interest Communities of interest in manufacturing Communities of interest in manufacturing example: BevPak • Economies of scale • Full utilization of capacity Independence from specific brand Independence from specific brands
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This note was uploaded on 04/15/2011 for the course FINA 4500 taught by Professor Staff during the Spring '08 term at North Texas.

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4500.17 - Project Financing Building Infrastructure Key...

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