Project Finance: Practical Case Studies

avoiding double taxation; sharing ownership of projects with employees; and/or establishing a business venture in a foreign cou ...

Infrastructure requirements There continue to be massive infrastructure requirements, particularly in developing coun- tries. Fo ...

Blending of project and corporate finance A lack of risk tolerance and market liquidity sometimes prevents projects from being f ...

revenue risk mitigation, including coverage against commodity pricing risk, revenue guarantees for toll road projects and cover ...

Interest rate volatility In the early 1990s, declining interest rates increased the number of financially viable projects. Altho ...

Declining importance of trading In an article published in October 2002, Robert Sheppard, a consultant and attorney based in Nor ...

Uncertainties concerning transmission One of the problems cited in the Panda-TECO merchant power case study is that insuffi- cie ...

traditional project finance always has been more robust than in most types of corporate finance. At the time of writing, for rea ...

lated power suppliers in 2002: PG&E National Energy Group, which had been one of the most highly respected developers and ow ...

Off-balance-sheet treatment, Lindenberg explains, may not be the principal reason for most project financing. It usually is carr ...

Rating agency downgrades Rating agencies are downgrading hitherto fast-growing independent power companies, or requiring them to ...

contract business to a trading, cash-flow kind of business in which the counterparty becomes critical to the viability of a tran ...

Salomon Smith Barney sees an overriding atmosphere of conservatism in disclosure — for example, in conference room discussions w ...

not be regarded as a suspect business per se, but it can involve the risk of sudden liquid- ity crises – especially for companie ...

not have the required expertise and was not particularly committed to those businesses when expectations were not met. Common th ...

banks the comfort of lending alongside a multilateral agency with so-called ‘preferred credi- tor’ status, were part of the fina ...

degree of financial difficulty. The reasons for financial difficulty fall into eight categories. Exhibit E lists these categorie ...

tion of a worldwide drop in wholesale electricity prices, economic collapse in Argentina and the ripple effects of the Enron ban ...

early 2002 and then re-emerged six months later (see Volume II – Resources and Infrastructure). Market risk, operating risk The ...

ly on sensitivity to local community concerns, as they provided local communities with need- ed infrastructure improvements and ...