Financing your energy transition

Financial and contractual arrangements, key sources of funding

Risk analysis, modelling elements

Your market situation and this course background

Whether you are an industrialist committed to the energy transition, an investor, a project developer, a bank or debt fund financing infrastructure projects, a lawyer or a management company working on sustainable assets (...)

... this training course gives you the keys to the sources of financing that can be mobilised for transition projects (Renewables, energy storage, hydrogen, carbon capture in particular), the main financial arrangements used, the market players and the European eco-system (EU taxonomy, labels, carbon finance market) to support the development of an energy transition strategy.

Your objectives

After completing this course, delegates will learn how to

• Structure financing solutions around an SPV for energy transition projects
• Identify projects’ funding sources: commercial banks, debt funds, dedicated investment funds, Socially Responsible Investment (SRI) funds, European Union financial support initiatives, public stimulus packages etc
  
• Carbon finance and how the carbon quota markets work
• Due Diligence financial and non-financial risks, both from an investors or bank perspective on transition projects such as energy storage,
  carbon capture, renewable energy, hydrogen, etc
• Analyse and test project cash flow models, determine the debt capacity of a project and calculate the main ratios (DSCR, ICR, IRR...)
• Negotiate a credit offer ("Term sheet") and understand how banks secure themselves
• Become familiar with the Anglo-Saxon terminology of project finance and energy transition

Learning approach

• An optimised mix of theoretical input on fundamentals and practical application
• Alternating quizzes, podcasts and workshops.
• Case studies from transactions structured on the markets, worked out in mini-groups (3 to 4 participants)
• Debriefing by the trainer after each workshop
• Quiz at the beginning of day 2 to monitor your assimilation

Course program :

Day 1 : Market trends, legal and contractual project set-ups, financing players.

Introduction: The evolution of the infrastructure and transitional energy markets in the wake of the pandemic crisis. State of the financial markets and project valuations.
Context of hyper-liquidity, low interest rates and renewed inflation: what impact on energy transition projects? The new EU taxonomy for sustainable investments.

A. Project Finance fundamentals How it compares to corporate or asset finance solutions (Asset Finance in Aero or Shipping).
Ice Breaker quiz.
Introducing on the main tender contractual packages under (1) B.O.T. concessions as well as (2) emphyteutic leases
Overview of key project parties and their role in the project risk management: industrial sponsors vs. purely financial sponsors (both as shareholders of the project company), State, equipment suppliers, engineering companies, offtaker, O&M company, etc.
• Case study: Financing of a major LNG project from Construction to Commissionning and current operations

B. Contracting around the project SPV: About EPC, O&M, Supply and PPA contracts; Emergence of "corporate PPA’s" in renewable energies
Case study: Example of a corporate PPA transaction in biogas

C. Lenders typology: private commercial banks providing recourse and non - recourse debt, guarantees & bonds, syndication and underwriting services, ...) versus Multilateral Development Banks and Export Credit Agencies
Special Focus: Comparative presentation of the main terms of intervention and coverage of major Export Credit Agencies (ECAs): BPI, UKEF, US Exim, KEXIM China Development Bank

D. New players in equity funding: private equity funds, VC’s, Green bonds. Infrastructure & Energy. The notion of subordinated debt: Senior, Junior, Mezzanine. And how it applies to the successive project timelines.
• Case study: Reviewing investment funds Copenhagen Infrastructure Partners (CIP, Denmark) and Eiffel Investissement (France) and their investment strategies on hydrogen, biofuels and offshore wind.

E. How do banks analyse and manage project risks? How to make a project "bankable"? Banking approach to project Due diligence. The crucial role of advisors (Tech, Tax, ESG, Insurance, Legal etc) in this due diligence process. Presentation of a risk matrix as a "toolbox" in preparation for financing and the development of the project's business model.

Day 2: Financing solutions for energy transition projects

Start-up quiz: Reviewing the fundamentals covered in Day 1 via our Project Finance Glossary

A. Project construction loans in non-recourse bank debt. Project modelling workshop. Scenari regarding CAPEX, OPEX, TRI and WACC. Calculation of the main ratios. Sizing the debt capacity of a project.
• Case study: the Bank’s model (BP on Excel) for financing an energy project. Presentation of the model ‘s architecture. How banks size the debt out of DSCR and CFADS. DSCR and debt calibration workshop. Introducing on Sensitivity parameters and how banks use them in their project risk analysis.

B. Financing under cover of Export Credit Agencies. About ECA Loans. Or how to finance suppliers of equipment and engineering services overseas?

C. Project Bond Financing and Green Bonds What is a bond and how does a bond fundraising on the markets work? Presentation of the Green Bonds Principles and the volume of this fast-growing market. The notion of "green labelling" of investment funds. The French “ISR” label and other major European green labels.
• Case study: Green Bonds issue of a major European energy group

D. Multilateral Development Banks and their support mechanisms to Energy transition projects.
Focus on the European Union's Green Deal and the European Investment Bank's (EIB) financial interventions in "sustainable “ projects. Understanding the new European taxonomy for sustainable investments and the concept of “Transition industries”

E. Carbon finance markets and the impact on your business: How are Carbon markets in and outside Europe organised. Presentation of the Greenhouse Gas (GHG) quotas and the impact of the current evolution of the CO2 prices for industries. Illustration of a quota trading transaction between two industrial companies.
• Case study: CCUS' Northern Lights project

F. The French Economic recovery plan with special focus on the Hydrogen Plan and the IPCEI H2 call for tenders.
• Recap case study: Structuring of the Northern Lights Carbon Capture & Storage (CCS) project in Norway. Work on the financing solutions to be put in place for this project

Conclusion on current market trends

Course Evaluation

Your training coach:

Sylvaine Chubert
Managing Director, SC Training & Consulting Sarl

Sylvaine CHUBERT has spent a large part of her career in international investment banking within several banking groups (BNP Paribas, ING, Rabobank, Bouwfonds - Abn Amro) where she held commercial and then risk management positions in corporate finance (SMEs and then major accounts), structured export and commodity finance and project finance.
She has more than twenty years of banking experience in arranging financing transactions and then in Risk Management on corporate and international trade finance transactions as well as on project finance. Back from expatriation, she created in 2010 her own consulting and training company, SC Training & Consulting Sarl. She assists industrial groups (engineering and construction companies and large energy groups) and Real estate groups (both developers & investors), financial institutions (banks, insurers, asset managers, investment funds, multilateral agencies) and their advisors on issues of debt raising and risk management for their international projects on three types of underlying assets: Infrastructure, Energy and Commercial Real Estate.
Also, on the academic level, she is Adjunct Faculty at EDHEC Business School where she teaches Project Finance and Structured Finance in the MSci Corporate Finance & Banking. Her international experience and language skills - she speaks seven languages - enable her to manage projects in multicultural and multilingual business environments with ease. Sylvaine is a graduate of Sciences Po Paris.

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