Mastering Structuring Debt and Equity in PPP Deals is a pivotal capability for professionals aiming to unlock complex infrastructure and public service projects, as the optimal blend and arrangement of financing sources are fundamental to ensuring project bankability, commercial viability, and long-term sustainability. Public-Private Partnerships (PPPs) inherently rely on sophisticated project finance structures, requiring a deep understanding of how to attract, negotiate, and integrate diverse forms of capital from senior debt and subordinated loans to various equity contributions while effectively allocating risks and aligning the interests of all financial stakeholders. This comprehensive training course is meticulously designed to equip financial analysts, project developers, investment bankers, and government officials with the advanced knowledge and practical skills to navigate the intricacies of PPP capital structures, enabling them to design, analyze, and negotiate financing solutions that meet project needs, satisfy lender requirements, and deliver attractive returns for investors. Without expertise in Structuring Debt and Equity in PPP Deals, projects risk being unfinanceable, fiscally unsustainable, or failing to attract the necessary private capital, underscoring the vital need for specialized expertise in this critical domain.

Duration: 10 Days

Target Audience

• Financial Analysts and Modellers
• Project Developers and Sponsors
• Investment Bankers and Fund Managers
• Commercial and Development Bank Professionals
• Private Equity and Infrastructure Fund Professionals
• Government Officials involved in project finance and fiscal risk management
• PPP Unit Professionals (especially those in financial appraisal)
• Consultants specializing in financial advisory for PPPs
• Legal Professionals advising on project finance
• Senior professionals seeking to enhance their expertise in infrastructure finance

Objectives

• Understand the fundamental principles of project finance in PPPs.
• Learn about the roles and motivations of different debt and equity providers.
• Acquire skills in designing optimal capital structures for PPP projects.
• Comprehend techniques for sizing and structuring various debt tranches.
• Explore strategies for attracting and integrating equity investments.
• Understand the importance of risk allocation from a financing perspective.
• Gain insights into negotiating key financial terms with lenders and equity investors.
• Develop a practical understanding of debt service cover ratios (DSCRs) and other financial metrics.
• Master security packages and direct agreements for lender protection.
• Acquire skills in managing refinancing and debt restructuring scenarios.
• Learn to apply international best practices in PPP financing.
• Comprehend techniques for ensuring project bankability and financial close.
• Explore strategies for leveraging government support and credit enhancements.
• Understand the importance of fiscal implications and contingent liabilities in financing.
• Develop the ability to confidently structure and negotiate complex PPP financing arrangements.

Course Content

Module 1: Introduction to Project Finance for PPPs

• Definition and key characteristics of project finance.
• Why project finance is preferred for PPPs (limited recourse, risk sharing).
• Overview of the project finance ecosystem and key participants.
• The Special Purpose Vehicle (SPV) and its legal separation.
• Relationship between project finance and the underlying PPP contract.

Module 2: Understanding Debt Providers and Their Requirements

• Types of debt providers: commercial banks, development banks, bond markets, ECAs.
• Motivations and risk appetites of different lenders.
• Key terms and conditions in project loan agreements.
• Due diligence requirements of lenders.
• Market trends in PPP debt financing.

Module 3: Understanding Equity Providers and Their Motivations

• Types of equity providers: project sponsors, infrastructure funds, private equity.
• Motivations for equity investment in PPPs (e.g., long-term returns, strategic fit).
• Equity IRR and other return metrics for equity investors.
• Role of shareholder agreements and joint venture agreements.
• Attracting equity capital for PPP projects.

Module 4: Capital Structure Design and Optimization

• Principles of optimal debt-to-equity ratios.
• Factors influencing capital structure decisions (risk profile, cash flow predictability, market conditions).
• Balancing leverage with project resilience.
• Impact of capital structure on project returns and affordability.
• Case studies of different capital structures in PPPs.

Module 5: Debt Sizing and Sculpting

• Methodologies for debt sizing (e.g., DSCR-driven, sculpted debt, fixed principal).
• Calculating Debt Service Cover Ratios (DSCR) and Loan Life Cover Ratios (LLCR).
• Sculpting debt repayment profiles to match project cash flows.
• Modeling debt service reserve accounts (DSRA) and other reserves.
• Practical exercises in debt sizing.

Module 6: Types of Debt Instruments

• Senior debt, subordinated debt, and mezzanine finance.
• Revolving credit facilities and working capital facilities.
• Bridge loans and construction finance.
• Legal and commercial terms of different debt instruments.
• Interplay between various debt tranches.

Module 7: Security Package and Lender Protection

• Legal mechanisms for granting security over project assets, contracts, and revenues.
• Perfection of security interests in different jurisdictions.
• Direct agreements between lenders, public authority, and project company.
• Step-in rights and cure periods for lenders.
• Insurance requirements from a lender's perspective.

Module 8: Inter-Creditor Arrangements

• Purpose and structure of inter-creditor agreements.
• Priority of payments and subordination of debt.
• Voting rights and decision-making among different classes of lenders.
• Common terms: standstill, information sharing, enforcement protocols.
• Negotiating inter-creditor terms.

Module 9: Government Support and Credit Enhancements

• Types of government support for PPP financing (e.g., viability gap funding, grants).
• Government guarantees: minimum revenue, foreign exchange, termination.
• Legal and fiscal implications of government guarantees.
• Role of MDBs and ECAs in providing credit enhancements.
• Structuring effective government support.

Module 10: Financial Close Process and Documentation

• Conditions precedent to financial close for debt and equity.
• Key legal and financial documents required for financial close.
• Managing the financial close checklist and timeline.
• Role of legal opinions and independent reviews.
• Post-financial close obligations.

Module 11: Refinancing and Debt Restructuring

• Triggers for refinancing in PPP projects.
• Benefits of refinancing for sponsors and public authority.
• Legal and financial aspects of debt restructuring.
• Managing distressed projects and workout scenarios.
• Case studies of PPP refinancing and restructuring.

Module 12: Fiscal Implications and Contingent Liabilities

• Impact of PPP financing on government balance sheets and debt levels.
• Accounting treatment of PPPs and contingent liabilities.
• Fiscal risk management frameworks for PPP programs.
• Transparency and reporting requirements for PPP financial obligations.
• Ensuring long-term fiscal sustainability.

Module 13: Cross-Border Financing Considerations

• Legal and regulatory challenges in cross-border PPP financing.
• Foreign exchange risk management and hedging strategies.
• Repatriation of profits and currency convertibility.
• Impact of international tax regimes.
• Navigating diverse legal and financial markets.

Module 14: ESG and Sustainable Finance in PPPs

• Growing importance of Environmental, Social, and Governance (ESG) factors in financing.
• Legal and financial aspects of green bonds and sustainability-linked loans.
• Social impact considerations in project finance.
• Due diligence on ESG compliance.
• Attracting impact investors to PPPs.

Module 15: Case Studies in PPP Financing

• In-depth analysis of financial structures from landmark PPP projects.
• Discussion of financing challenges and innovative solutions.
• Lessons learned from successful and challenging financial closures.
• Role-playing and negotiation exercises for financing terms.
• Future trends in PPP financing (e.g., digitalization, new funding sources).

Training Approach

This course will be delivered by our skilled trainers who have vast knowledge and experience as expert professionals in the fields. The course is taught in English and through a mix of theory, practical activities, group discussion and case studies. Course manuals and additional training materials will be provided to the participants upon completion of the training.

Tailor-Made Course

This course can also be tailor-made to meet organization requirement. For further inquiries, please contact us on: Email: info@skillsforafrica.org, training@skillsforafrica.org Tel: +254 702 249 449

Training Venue

The training will be held at our Skills for Africa Training Institute Training Centre. We also offer training for a group at requested location all over the world. The course fee covers the course tuition, training materials, two break refreshments, and buffet lunch.

Visa application, travel expenses, airport transfers, dinners, accommodation, insurance, and other personal expenses are catered by the participant

Certification

Participants will be issued with Skills for Africa Training Institute certificate upon completion of this course.

Airport Pickup and Accommodation

Airport pickup and accommodation is arranged upon request. For booking contact our Training Coordinator through Email: info@skillsforafrica.org, training@skillsforafrica.org Tel: +254 702 249 449

Terms of Payment: Unless otherwise agreed between the two parties’ payment of the course fee should be done 7 working days before commencement of the training.