New frontiers: New finance
The way energy projects are financed is changing and it is changing fast.
With stricter regulations coming into force, continuing Eurozone uncertainties and the increasing fall-out from the global financial crisis, no longer can sponsors and arrangers rely on debt finance in the traditional way.
So what will the new financial landscape look like? How will energy projects be financed? Who will plug the funding gap?
We have drawn on our global network to identify trends and develop innovative finance structures, with the aim to create an understanding of some of the alternative methods of energy project financing available. We want to share these ideas with you and develop them further together to create new opportunities for the energy sector.
We have created a series of five minute videos as an introduction to the various topics below. These are complimented by practical and interactive workshops, developed by our energy project financing experts and deliverable either at our offices or at your own office, anywhere in the world.
Video clips and interactive workshops
ECA and Multilateral Support in Debt Finance
Export credit agency and multilateral support is becoming increasingly important in project financings. Structuring transactions in a way that can attract and accommodate multiple agency support is key, together with anticipating and managing differing policy and intercreditor requirements. New export credit agencies are entering the global market and the ownership structures of some ECAs are evolving. Some ECAs are developing innovative new products to fill the gaps caused by the lack of liquidity in the common bank market.
ECA and Multilateral Support in Capital Markets
Will the capital markets be the “saviour” of project finance? Raising debt on the capital markets for Greenfield projects has always been a challenge. ECAs and multilaterals can take on risks which mitigate construction issues and attract new investors. We will look at the steps ECAs and multilaterals are taking to develop new structures and promote exports through capital markets structures.
Several project bonds have been issued to date in both the renewables and the oil and gas sectors. How have arrangers managed to get investors to take construction risk? We will look at some of the risk mitigants that can be used and the relevant considerations of the rating agencies. We will also analyse the different bond markets and their appetite for certain types of projects.
Alternative Sources of Funds from the Public Sector
Several Governments around the world are launching initiatives to kickstart their economies. We will look at some of these new financing ideas and analyse their practical applicability to financings in the energy sector.
Alternative Sources of Funds from the Private Sector
The lack of liquidity in the banking arena is becoming one of the biggest barriers to new financings for the energy sector. Alternative funding sources need to be tapped and we will look at the different ways this can be achieved drawing from private sector sources.
A guaranteed rate of return?
A new class of investors are seeking guaranteed levels of return. Institutional investors will be looking for a secure long term inflation-linked rate of return, whereas equity investors will be looking for short term high yield returns and a planned exit strategy. These considerations need to be built into financing structures which in some cases will need to accommodate multiple types of investors.
For further details on areas covered by each workshop session, please view the full New frontiers: New finance interactive workshops guide here.
If you would like to register your interest or for any further information on our New frontiers: New finance interactive workshops, please contact Ben Smith.
This initiative is in collaboration with our New finance group - Building a new financial landscape: working with our clients by sharing knowledge and expertise, generating innovation and fostering collaboration across industry sectors.
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