Finance Session

1

Phil Dowrick

HVO Project KWT-1

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

3

Project Scale

3High Value Opportunities Programme

4

John Snowdon

E.C.G.D.

5

Paul Corcut

HVO Project RUS-23

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

8

Peter Sargent

ANZ Bank London

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

1212

Shakeel Mughal

ZAF 11 – PPP Hospitals in South Africa

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?

15

Richard Normington

City UK

171717

www.ukti.gov.uk