Investor Confidence: Risk-adjusted Return and Bankability in PPPs Training Course

Introduction

For Public-Private Partnerships (PPPs) to successfully attract the necessary private capital, projects must demonstrate not only financial viability but also a compelling risk-adjusted return that meets the expectations of diverse investors and lenders. "Bankability" is the ultimate benchmark, signifying a project's ability to secure financing on commercially acceptable terms, a direct reflection of how well risks are identified, allocated, and mitigated across all project phases. Achieving this delicate balance between public interest and private profitability requires a sophisticated understanding of financial structuring, risk assessment, and market dynamics.

This intensive training course is meticulously designed to equip public sector decision-makers, private sector developers, project finance professionals, and investment analysts with the advanced knowledge and practical tools required to assess, optimize, and ensure the risk-adjusted return and bankability of PPP projects. From dissecting various risk types and their impact on returns to mastering financial modeling for debt service coverage, equity returns, and robust sensitivity analysis, you will gain the expertise to structure deals that attract capital. This empowers you to drive successful project financing, enhance investor confidence, and ultimately deliver critical infrastructure and public services.

Target Audience

  • Project Finance Professionals from commercial banks, investment funds, and DFIs.
  • Private Sector Project Developers and Sponsors.
  • PPP Unit Staff and Government Officials involved in project appraisal and negotiation.
  • Financial Advisors and Consultants specializing in infrastructure.
  • Investment Analysts and Portfolio Managers.
  • Corporate Finance Managers in companies pursuing PPPs.
  • Legal Professionals drafting finance documentation for PPPs.
  • Anyone seeking in-depth expertise in the financial viability and risk assessment of PPP projects.

Duration: 10 days

Course Objectives

Upon completion of this training course, participants will be able to:

  • Understand the core concepts of risk-adjusted return and project bankability in PPPs.
  • Grasp the motivations and risk appetites of various project finance participants.
  • Analyze the key drivers that influence a project's bankability.
  • Comprehend methodologies for identifying, assessing, and allocating project risks.
  • Evaluate the impact of different risk allocation strategies on financial returns.
  • Develop practical skills in calculating and interpreting key risk-adjusted return metrics.
  • Navigate the complexities of financial modeling to demonstrate bankability.
  • Formulate robust strategies for enhancing project bankability and attracting financing.
  • Understand the role of credit enhancement and government support in de-risking projects.
  • Champion best practices in presenting a compelling investment case to lenders and equity providers.
  • Recognize common pitfalls and challenges in achieving bankability in PPPs.
  • Appreciate the interplay between contract structuring, risk transfer, and financial terms.
  • Distinguish between different types of financial and non-financial risks.
  • Understand the due diligence process from a lender's perspective.
  • Strategize for optimizing capital structures to meet investor return expectations.

Course Content

  1. Introduction to Risk-adjusted Return and Bankability
  • Definition of risk-adjusted return and its importance in investment decisions.
  • Understanding project bankability: what it means for lenders and equity investors.
  • The symbiotic relationship between risk, return, and bankability in PPPs.
  • Overview of the course objectives and key concepts.
  • The investor's perspective in PPP project evaluation.
  1. Key Project Finance Concepts for Bankability
  • Non-recourse vs. limited-recourse financing.
  • The role of the Special Purpose Vehicle (SPV).
  • Cash flow-based lending and its implications.
  • Debt-to-equity ratios and leverage in PPPs.
  • Understanding the project finance ecosystem.
  1. Comprehensive Risk Identification in PPPs
  • Categorization of risks: construction, operational, market, financial, political, legal, environmental, social.
  • Identifying project-specific and systemic risks.
  • Tools for risk identification: risk registers, workshops, checklists.
  • Understanding the interdependencies between different risk types.
  • Early identification of critical risks affecting bankability.
  1. Risk Assessment and Quantification
  • Qualitative risk assessment: likelihood and impact matrices.
  • Quantitative risk assessment: sensitivity analysis, scenario analysis.
  • Introduction to Monte Carlo simulation for risk modeling.
  • Valuing risks for financial modeling purposes.
  • Benchmarking risk levels against comparable projects.
  1. Principles of Optimal Risk Allocation
  • The "risk to the party best able to manage it" principle.
  • Analyzing risk allocation in different PPP models (e.g., BOT, Concession).
  • Impact of risk transfer on project costs and returns.
  • Negotiating risk allocation between public and private sectors.
  • Contractual mechanisms for risk sharing and mitigation.
  1. Financial Modeling for Bankability Assessment
  • Core components of a bankable financial model.
  • Forecasting robust cash flows for debt service and equity returns.
  • Modeling debt service coverage ratios (DSCR) and loan life cover ratios (LLCR).
  • Calculating equity Internal Rate of Return (IRR) and Net Present Value (NPV).
  • Ensuring model transparency, flexibility, and auditability.
  1. Debt Structuring for Bankability
  • Types of debt instruments: senior, subordinated, mezzanine.
  • Debt sizing and repayment profiles (e.g., sculpted debt).
  • Loan covenants and their impact on project operations.
  • Understanding debt service reserve accounts (DSRA) and other reserves.
  • Refinancing considerations and their effect on bankability.
  1. Equity Returns and Investor Expectations
  • Factors influencing equity investor return requirements.
  • Modeling equity contributions and distributions.
  • Analyzing equity IRR and cash-on-cash returns.
  • Understanding the equity waterfall mechanism.
  • Balancing equity returns with public sector affordability.
  1. Credit Enhancement and Government Support
  • Types of credit enhancement: guarantees (sovereign, partial), political risk insurance.
  • Viability Gap Funding (VGF) and its role in improving bankability.
  • Subsidies, grants, and other forms of public support.
  • Assessing the fiscal implications of government support.
  • Leveraging DFI and MDB support for de-risking.
  1. Legal Framework and Documentation for Bankability
  • Key legal agreements in a project finance PPP (e.g., Concession Agreement, Loan Agreement, Security Package).
  • Ensuring enforceability of contracts and security interests.
  • Legal due diligence requirements for lenders.
  • Dispute resolution mechanisms and their impact on bankability.
  • Consistency between legal terms and financial model assumptions.
  1. Due Diligence from a Lender's Perspective
  • Technical due diligence: assessing project design and construction risks.
  • Commercial due diligence: market analysis, demand forecasts, revenue projections.
  • Environmental and social due diligence: compliance and impact.
  • Legal and financial due diligence: reviewing contracts and financial models.
  • The role of independent advisors in the due diligence process.
  1. Challenges in Achieving Bankability
  • Information asymmetry and data limitations.
  • Political and regulatory uncertainties.
  • Unrealistic risk allocation and optimism bias.
  • Lack of robust project pipeline.
  • Limited local financial market capacity.
  • Currency convertibility and transfer risks.
  1. Strategies for Enhancing Project Bankability
  • Robust project preparation and feasibility studies.
  • Transparent and competitive procurement processes.
  • Effective risk allocation and mitigation strategies.
  • Optimizing capital structure and financing mix.
  • Engaging experienced advisors and strong sponsors.
  • Developing a clear and stable legal and regulatory framework.
  1. Post-Financial Close Monitoring and Management
  • Monitoring project performance against financial covenants.
  • Managing changes, variations, and renegotiations.
  • Addressing distressed projects and potential defaults.
  • Refinancing opportunities and strategies.
  • Maintaining strong relationships with lenders and investors.
  1. Case Studies and Practical Applications
  • Analysis of successful PPP projects that achieved bankability.
  • Examination of projects that faced bankability challenges and their resolution.
  • Hands-on exercises in assessing risk-adjusted returns and bankability metrics.
  • Group discussions on structuring bankable deals in various sectors.
  • Lessons learned from international best practices in PPP financing.

CERTIFICATION

  • Upon successful completion of this training, participants will be issued with Macskills Training and Development Institute Certificate

TRAINING VENUE

  • Training will be held at Macskills Training Centre. We also tailor make the training upon request at different locations across the world.

AIRPORT PICK UP AND ACCOMMODATION

  • Airport Pick Up is provided by the institute. Accommodation is arranged upon request

TERMS OF PAYMENT

Payment should be made to Macskills Development Institute bank account before the start of the training and receipts sent to info@macskillsdevelopment.com

For More Details call: +254-114-087-180

 

 

 

Investor Confidence: Risk-adjusted Return And Bankability In Ppps Training Course in Somalia
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