Contents
Chapter 1: What Is Project Financing?
Requirements for Project Financing
Appropriateness of Project Financing
Chapter 2: The Rationale for Project Financing
The Advantages of Separate Incorporation
Countering the Underinvestment Problem
Reducing Asymmetric Information and Signaling Costs
More Efficient Structuring of Debt Contracts
More Effective Corporate Organization and Management Compensation
Project Financing versus Direct Financing
Advantages of Project Financing
Disadvantages of Project Financing
Chapter 3: What Is Special about Large Projects?
How Large Are “Large” Projects?
Initial Project Capital Structure
Why Studying Project Finance Is Useful
Why Study How Large Projects Are Financed?
Chapter 4: Who Finances Large Projects?
Sources of Funds for Large Projects
Lead Arrangers, Managing Underwriters, and Advisors
Chapter 5: Analyzing Project Viability
Implications for Project Financing
Chapter 6: Analysis and Financing of Renewable Energy Projects
What Is Special About Renewable Energy Projects?
International Standards for Promoting Environmentally and Socially Responsible Investing
Evaluating the Viability of a Renewable Energy Project
Example: The La Confluencia Hydroelectric Power Project
The La Confluencia Hydroelectric Power Project and Responsible Investing
Chapter 7: Designing Security Arrangements
Purpose of Security Arrangements
Direct Security Interest in Project Facilities
Security Arrangements Covering Completion
Security Arrangements Covering Debt Service
Types of Purchase and Sale Contracts
Raw Material Supply Agreements
Chapter 8: Structuring the Project
Chapter 9: Preparing the Project Financing Plan
Withholding Tax Considerations
Estimating the Borrowing Capacity of a Project
Borrowing Capacity, Assuming Full Drawdown Immediately Prior to Project Completion
Borrowing Capacity, Assuming Periodic Loan Drawdowns
Application to a Hypothetical High-Speed Rail Project
Chapter 10: Discounted Cash Flow Analysis
Incremental After-Tax Cash Flows
Estimating the Cost of Capital for a Project
Internal Rate of Return Analysis
Comparing IRR and NPV Analyses
Chapter 11: Financial Modeling and Project Evaluation
Preparing Cash Flow Projections
Preparing Projected Financial Statements
Evaluating a Project's Debt Capacity
Measuring Expected Rates of Return
Chapter 12: Using Real-Options Analysis to Evaluate a Project
Description of the Oil Field Project
Sensitivity of Option Value to Oil Price Volatility and to Reserve Dispersion
Chapter 13: Sources of Project Funds
Inter-American Development Bank
Chapter 14: Managing Project Risks
Chapter 15: Sharia-Compliant Project Financing
Example: The Saudi Chevron Petrochemical Project
The Future of Islamic Project Finance
Chapter 16: Issues for the Host Government
Contribution to the Host Jurisdiction's Economic Development
Host Jurisdiction's Expected Economic Return
Impact on the Availability of Hard Currency
Exposure of the Host Government to the Project's Obligation to Repay Project Debt
Avoiding Undesirable Precedents
Public–Private Infrastructure Partnerships
Public–Private Financing Structures
Legislative Provisions that Can Affect Public–Private Partnerships
Chapter 17: Case Study: The Indiantown Cogeneration Project
The Partnership and the Sponsors of the Project
Chapter 18: Case Study: The Tribasa Toll Road Project
The Mexican Government's Toll Road Program
Infrastructure Financing Alternatives
Risk Considerations in Foreign Infrastructure Projects
Tribasa Toll Road Trust 1 Financing
Chapter 19: Case Study: The Euro Disneyland Project
Master Agreement with the French Government
Interests of the Participants in the Project
Chapter 20: Case Study: The Eurotunnel Project
Reaping the Benefits of Project Financing
Recognizing When Project Financing Can Be Beneficial
Potential Future Applications of Project Financing
Appendix A: Comparative Terms of Selected Projects
Appendix B: Other Examples of Project Financings
Appendix C: Legal Investment Requirements Governing New York Life Insurance Companies