3807178: After-Work Lecture: Project Finance – Risk Profile and Structuring Techniques of a Major Infrastructure Development Tool

Description

The upcoming After-Work Lecture is a special event as the "Liechtenstein Society of Investment Professionals" (LSIP) has just turned into the "CFA Society Liechtenstein" and is, therefore, an official member of the CFA Institute. This change will be celebrated as part of the After-Work Lecture on 2nd October 2014.
For the first time we will have two guest speakers. The leading speech is by Dr. Jürg Gassmann on “Project Finance – Risk Profile and Structuring Techniques of a Major Infrastructure Development Tool” and a subsequent Inaugural Note by Nitin Mehta, CFA, on “Ethics in the Financial Industry“.

Abstract
Project Finance is a financing technique commonly employed to design, procure, build and operate large infrastructure projects such as power stations, satellite systems, pipelines or roads. The financing is based on the concept that a special purpose vehicle will raise equity and debt finance sufficient to construct the asset, and the debt finance will be repaid exclusively from the cash flow generated by the asset. Compared to straightforward asset finance, project finance faces the additional risk that the asset cannot be completed on time, within the budget or with the required technical performance. To ensure that the operation of the asset will yield a sufficient cash flow to service the debt, the developer needs to ensure, at financial close, that the permits and licences, the financing documents, the construction contract, the off-take agreement, the inputs or feedstock supply agreements, the operations and maintenance agreements as well as the insurance scheme and the equity structure are all coordinated from a commercial, legal and technical point of view.
The technical and legal complexity of project finance documentation requires experts and experienced practitioners already at the early stages of the project's development, as well as a good interdisciplinary understanding of the technical, legal and commercial challenges involved. The talk will provide participants with an overview over the structure, phasing, challenges, risk management techniques and rewards of project finance.