2
Project Overview
Kuwait airport terminal
Project Value £2Bn+
Capacity 7mppa to 50mppa
Accessible Value £550m.
Terminal. New (Fosters and Arup) designed terminal 30mppa. Tendering Q4 2011. Construction start Sept 2012 for 3 years. Non-Kuwaiti prime contractors.
Non-terminal. Runways and aprons (tendered), access roads, 3million m2 cargo city (started), Fuel farm (pre-tender/PPP), Hotel (pre-tender/PPP), Fire Stations (awarded). MRO service (PPP) Mainly Kuwaiti contractors.
High Value Opportunities Programme
6
Project Overview
Russian Railways Stations Modernisation Programme
RUS-23
Project Value £6Bn.
Accessible Value £450m.
Russia
4 programmes totalling £6Bn; reconstruction and modernisation of 300+ passenger railway stations for delivery 2013-15; roll-out Hi-speed rail ops; development hub/interchange system by 2020; MOU RZD/UKTI September; 8 pilot stations allocated; work on first 3 to start November; FIFA 2018 is driver.
High Value Opportunities Programme
7
The Challenges
High Value Opportunities Programme
First time client, heavily bureaucratic
Finance – ECGD package
Finance – PPP mechanism for Hi-Speed
Finance - IPO
Helping UK Exporters with Infrastructure projects
November 2011
Peter Sargent
Head of Transaction Banking, Europe
10
Structuring a generic project with ECA involvement – TIMELINE
• Buyer Credit
• Tied Commercial Loan
• Sub debt - Bond issue/High Yield/Private Placement
• Syndication
• Hedging
• Finalisation of Documentation
• Agency, Account Bank
• Security Trustee
• Refinancing
Negotiationson delivery
Commercial structuring
CoverApplication
Finance negotiations
Financial close
Post completion
Time
In parallel:ECA decision making process:- Preliminary Approval- Final Approval
Sta
ge
of
pro
ject
• Sounding of ECA for country risk
• Interaction with an external technical consultants in case of project finance
• Ability to perform initial project and market analysis quickly
• Selection of main vendors
• Initial financial models to determine economical impact
• Formal application with ECA and/or PRI
• Full Info memo on project (economics, ecology, etc)
• Deal Structuring (Borrowers, Guarantors, Sponsors involvement)
In parallel:ECA decision making process:- Information on Financial Close- Issuance of Cover Policy
11
European suppliers can identify opportunities by studying the Supply Chains of Australian projects
A typical LNG Supply Chain - excludes offtakers
>Products - RMs
Become a client – RCF
Joint ventures
> Products - TB
Bid bonds
Performance bonds
Receivables purchase
Transactive – cash/trade
Partnership with FI clients
>Products – SL
ECA backed lending
Associated clean lending
>Products – Markets
FX
Deposits
>Products – Int Banking Services
Skilled workers/visa advice
Local banking arrangements
Building solutions from the following products
1313
Project Overview
Project Name : PPP Hospitals
Project Number : ZAF 11
Project Value : £1.1Bn
Accessible Value : £880m
Project Location : South Africa
Project Description
Part of a wider project to improve and expand South African health care, this project covers the development of new hospitals financed through Public Private Partnership.
High Value Opportunities Programme
1414
The Challenges
High Value Opportunities Programme
Understand the South African PPP concept and model; Identify the risks. Where does the risk reside. Mitigation strategies.
Who will be the final guarantor?
How will the South African DOH fund payments?
Agreeing the cost and re-payment models.
If bidders use the ECGD guarantee how will they raise the balance not covered by the guarantee?
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