Introduction to Project Finance

Preface vii Overview of project finance 1(44) Introduction to project finance 1(1) Uses for project finance 2(1) Why use project financing 3(5) Description of a typical project finance transaction 8(3) Parties to a project financing 11(21) Financing sources used in project financing 32(13) Understanding key project risks 45(36) Entity risks 45(5) Transaction risks 50(14) Mitigating and managing project risks 64(9) Security 73(4) Insurance issues 77(4) Evaluating the project 81(31) The offering memorandum 81(2) Legislation relating to information memoranda 83(4) Information memorandum issues 87(21) Credit risk appraisal: general considerations 108(4) Contractual framework 112(27) General 112(1) Pre-development agreements 112(1) Construction agreements 113(1) Contractors bonds 114(1) Operating and maintenance agreements 115(1) Sponsor support agreements 116(1) Management agreements 116(1) Representations and warranties 117(1) Project loan/credit agreements 118(19) Security agreements 137(2) Project financing in the economy 139(12) Project financing and the privatization agenda 139(6) Project finance tables 145(1) The UK PFI model 145(6) Appendices 151(24) Appendix 1: Generally accepted risk principles risk map 151(2) Appendix 2: Credit rating agency rating scales 153(3) Appendix 3: Country risk criteria 156(10) Appendix 4: World Bank country categories 166(9) Glossary 175(22) Suggested reading 197(2) Index 199