ABOUT THIS VIRTUAL INSTRUCTOR LED TRAINING (VILT)
This 4 half-day Virtual Instructor Led Training (VILT) course will address a
variety of contract and loan structuring issues associated with geothermal
energy projects as well as comparison with solar, wind and battery storage. The
course is designed to investigate how various project finance techniques and
contract structures can be used to achieve a competitive power prices while
maintaining a satisfactory equity return. Distinctive project finance features
of power facilities that depend on geothermal, wind, hydro or solar resources
will be evaluated with financial models.
The course will cover economic analysis of exploration and development of
geothermal facilities and how to incorporate probability of failure and success
into an IRR framework. Subsequent sessions will address the theory underlying
liquidated damages for delay, and performance as well as design of other
incentives that is inherent in different contract structures. Nuanced project
finance issues associated with structuring debt for renewable projects will be
discussed including under what conditions the DSCR drives debt capacity and when
the debt to capital ratio is instrumental.
The course will be taught with a combination of theoretical discussions, term
sheet review and focused financial models.
Training Objectives
* Evaluation of the economic risks that arise from uncertainty associated with
drilling exploration wells and development wells for geothermal projects.
* Analyse the theoretical issues with computing LCOE for geothermal projects
compared to other renewable and non-renewable resources and the importance of
cost of capital for renewable projects;
* Understand differences in contract structures for renewable projects and
dispatchable projects and how a single price structure can distort incentives
for efficient construction and operation;
* Understand components of financing that influence the bid price required to
meet a required rate of return on equity and can result in relatively low
prices with reasonable returns.
* Understand the importance of debt sizing constraints and what strategies are
relevant when the debt to capital constraint applies relative to when the
debt service coverage ratio drives the debt size;
* Understand how to compute P50, P90 and P99 for different projects driven by
resource risk;
* Understand the difference between mean reverting resource variation and
estimation mistakes that do not correct as the basis for 1-year P90 and
10-year P90.
* Understand under what conditions debt sculpting can affect returns and how
synthetic sculpting can be used to increase returns when the DSCR constraint
applies.
* Understand the theory of credit spreads, variable rate debt and interest
rates in different currencies and compute the implied probability of default
that in inherent in credit spreads.
* Understand how to evaluate the costs to equity investors and the benefits to
lenders for various credit enhancements including DSRA accounts, cash flow
sweeps and covenants.
Course Level
* Basic or Foundation
Training Methods
The VILT will be delivered online in 4 sessions comprising 4 hours per day, with
2 breaks of 10 minutes per day, including time for lectures, discussion, quizzes
and short classroom exercises.
Trainer
Your expert course leader provides financial and economic consulting services to
a variety of clients, he teaches professional development courses in an
assortment of modelling topics (project finance, M&A, and energy). He is
passionate about teaching in Africa, South America, Asia and Europe. Many of the
unique analytical concepts and modelling techniques he has developed have arisen
from discussion with participants in his courses. He has taught customized
courses for MIT's Sloan Business School, Bank Paribas, Shell Oil, Society
General, General Electric, HSBC, GDF Suez, Citibank, CIMB, Lind Lakers, Saudi
Aramco and many other energy and industrial clients. His consulting activities
include developing complex project finance, corporate and simulation models,
providing expert testimony on financial and economic issues before energy
regulatory agencies, and advisory services to support merger and acquisition
projects.
Our key course expert has written a textbook titled Corporate and Project
Finance Modelling, Theory and Practice published by Wiley Finance. The book
introduces unique modelling techniques that address many complex issues that are
not typically used by even the most experienced financial analysts. For example,
it describes how to build user-defined functions to solve circular logic without
cumbersome copy and paste macros; how to write function that derives the ratio
of EV/EBITDA accounting for asset life, historical growth, taxes, return on
investment, and cost of capital; and how to efficiently solve many project
finance issues related to debt structuring. He is in the process of writing a
second book that describes a series of valuation and analytical mistakes made in
finance. This book uses many case studies from Harvard Business School that were
thought to represent effective business strategies and later turned into
valuation nightmares.
Over the course of his career our key course expert has been involved in
formulating significant government policy related to electricity deregulation;
he has prepared models and analyses for many clients around the world; he has
evaluated energy purchasing decisions for many corporations; and, he has
provided advice on corporate strategy. His projects include development of a
biomass plant, analysis and advisory work for purchase of electricity
generation, distribution and transmission assets by the City of Chicago,
formulation of rate policy for major metro systems and street lighting networks,
advocacy testimony on behalf of low income consumers, risk analysis for toll
roads, and evaluation of solar and wind projects. He has constructed many
advisory analyses for project finance and merger and acquisition transactions.
Lastly, our key course expert was formerly Vice President at the First National
Bank of Chicago where he directed analysis of energy loans and also created
financial modelling techniques used in advisory projects. He received an MBA
specializing in econometrics (with honours) from the University of Chicago and a
BSc in Finance from the University of Illinois (with highest university
honours).
POST TRAINING COACHING SUPPORT (OPTIONAL)
To further optimise your learning experience from our courses, we also offer
individualized 'One to One' coaching support for 2 hours post training. We can
help improve your competence in your chosen area of interest, based on your
learning needs and available hours. This is a great opportunity to improve your
capability and confidence in a particular area of expertise. It will be
delivered over a secure video conference call by one of our senior trainers.
They will work with you to create a tailor-made coaching program that will help
you achieve your goals faster.
Request for further information about post training coaching support and fees
applicable for this.
Accreditions And Affliations