The Law and Business of International Project Finance : A Resource for Governments, Sponsors, Lenders, Lawyers, and Project Participants. 2nd Edition.

Format:

Book

Author/Creator:

Hoffman, Scott.

Language:

English

Subjects (All):

Project finance.

International business enterprises--Finance.

International business enterprises.

Physical Description:

1 online resource (524 pages)

Edition:

2nd ed.

Place of Publication:

Boston : BRILL, 2001.

Summary:

This extensively updated third edition provides a comprehensive guide to the business, legal, and practical aspects of international project finance. Covering the entire lifecycle of project finance, from conception to negotiation, debt structuring, and risk mitigation, the book is accessible to both beginners and seasoned professionals in the field. It emphasizes practical applications over theoretical frameworks, offering contract forms, a glossary, and a bibliography. Written by Scott L. Hoffman, a recognized authority in project finance, the book is tailored for lawyers, managers, bankers, contractors, and government officials. Subjects include risk allocation, cross-border challenges, and strategies for financing large-scale infrastructure and energy projects globally. The content reflects real-world insights drawn from decades of industry experience. Generated by AI.

Contents:

Intro

Title Page

Copyright Page

Dedication

Table of Contents

Preface to the Third Edition

Preface to the Second Edition

Preface to the First Edition

PART ONE. AN INTRODUCTION TO PROJECT FINANCE

CHAPTER ONE. AN INTRODUCTION TO PROJECT FINANCE

1.01 Definition of Project Finance

1.02 Confusion of Terms

1.03 Nonrecourse Project Finance

1.04 Limited Recourse Project Finance

1.05 Structured Project Finance - Toward Greater Economic Efficiency?

1.06 Contrast With Other Financing types

[1] Balance Sheet Finance

[2] Asset-Based Finance

1.07 Uses of Project Finance

1.08 Basic Components of Project Finance

1.09 Advantages of Project Finance

[1] Nonrecourse Debt Financing - It Ain't Necessarily So

[2] Off-Balance-Sheet Debt Treatment

[3] Leveraged Debt

[4] Avoidance of Restrictive Covenants in Other Transactions

[5] Favorable Financing Terms

[6] Internal Capital Commitment Policies

[7] Political Risk Diversification

[8] Risk Sharing

[9] Collateral Limited to Project Assets

[10] Lenders Are More Likely to Participate in a Workout Than Foreclose

[11] Matching Specific Assets With Liabilities

[12] Expanded Credit Opportunities

1.10 Disadvantages of Project Finance

[1] Complexity of Risk Allocation

[2] Increased Lender Risk

[3] Higher Interest Rates and Fees

[4] Lender Supervision

[5] Lender Reporting Requirements

[6] Increased Insurance Coverage

[7] Encourages Potentially Unacceptable Risk Taking

1.11 International Project Finance

1.12 Examples of Facilities Developed With Project Finance

[1] Energy Generation

[2] Pipelines, Storage Facilities, and Refineries

[3] Mining

[4] Toll Roads

[5] Waste Disposal

[6] Water

[7] Telecommunications.

[8] Uses by Industrial Companies for Growth and Restructuring

[9] Leisure and Sports Stadium Projects

[10] Ethanol Production

[11] Other Projects

[12] Contrasting Risks

1.13 Chicken or the Egg: The Effect of a Project's Financing Structure on Its Commercial Structure

1.14 Merchant Facilities: Projects Financed Without Revenue Contracts

1.15 Project Finance in Developing Countries

1.16 Other Financing Alternatives

1.17 Bankability, Financeability, and Other Assaults on Language

1.18 The Law of Project Finance - Sources of Project Finance Law and Standards

1.19 Economic Studies of Project Finance

1.20 The Lessons of a Financial Crisis - What the East Asian Financial Crisis Teaches About Project Finance

[1] Increased Cost of Power

[2] Power Purchase Contract Renegotiation

[3] Decrease in Market Demand for Private Power

[4] Conclusions

1.21 Political Risk: The Dabhol Project

1.22 Project Cancellations

PART TWO. RISK IDENTIFICATION, ALLOCATION, AND MITIGATION

CHAPTER TWO. PROJECT FINANCE RISKS

2.01 Risk

2.02 The Risk Matrix

2.03 Project Finance Participants and Perspectives

[1] Development Risks

[2] Design Engineering and Construction Risks

[3] Start-up Risks

[4] Operating Risks

2.04 Objectives of Project Finance Participants

2.05 Risk Identification by Participants

[1] Sponsor

[2] Construction Lender

[3] Permanent Lender

[4] Contractor

[5] Operator

[6] Technology Owner

[7] Supplier

[8] Output Purchaser

[9] Host Government

[10] Other Governments - Export and Transit Countries

[11] Equity Investor

[12] Multilateral and Bilateral Agencies

2.06 Development Stage Risks

2.07 The Joint Venture as a Risk Mitigation Device

2.08 A Caveat About Risk Allocation.

CHAPTER THREE. PROJECT FINANCE CROSS-BORDER RISKS

3.01 Generally

3.02 Currency-Related Risks

[1] Generally

[2] Nonconvertibility of Currency (Unavailability of Foreign Exchange)

[3] Currency Transfer (Inability to Transfer Foreign Exchange Abroad)

Generally

Types and Characteristics of Exchange Controls

Violation of Exchange Laws

Enforcement of Transactions That Violate a Country's Exchange Controls

Exchange Permissions and Consents

Reducing Exposure to Exchange Controls

[4] Currency Devaluation Risk Caused by Fluctuations in Foreign Exchange Rates

Indexing Revenues

Matching Revenue Currency to Debt Currency

Raising Debt in Local Currency

Derivatives

Sharing of Risk

[5] Offshore Accounts

[6] Special Currency Problems in Large-Scale Projects

[7] Advance Approvals

Consent

Exemption

Debt Repayment

[8] Summary of Currency Risk Minimization Techniques

Payment in Hard Currency

Foreign Exchange Risk Insurance

Indexed Local Currency Payments

3.03 Permit, Concession, and License Risk

[1] Permits

[2] Concessions and Licenses

3.04 Expropriation Risk

3.05 Expatriation

3.06 Change of Law Risk

[1] Import Tariffs

[2] Export Tariffs

[3] Production or Consumption Controls

[4] Taxes

Taxes on Income

Customs Duties

Withholding Tax on Payment of Interest

Nondiscrimination

[5] Environmental Controls

[6] Regulation and Deregulation

[7] Price Controls

[8] Privatization of Suppliers or Purchasers

[9] Change in Foreign Laws

3.07 Political Violence, Civil Unrest, War, and Other Political Force Majeure Events

3.08 Political Collapse and Succession

3.09 Preemption and Priority

3.10 Sovereign Risk

3.11 Breach of Undertakings (Contract Repudiation)

3.12 Collateral Risk.

[1] What Type of Collateral Security Does the Sovereign Government Allow?

[2] Are All Local Formalities Complied With?

[3] What Is the Priority of the Lien?

[4] How Is the Lien Enforced?

[5] How Does the Foreclosure Process Work?

[6] Collateral Trusts

[7] Real Property

[8] Interaction Among Risks

3.13 Law and Legal System Risks

[1] Choice of Law

[2] Agent for Process and Submission to Jurisdiction

[3] Dispute Resolution

[4] Fees, Approvals, and Filings

[5] Legal Expertise and Experience

[6] General Business Law and Regulation

[7] Waiver of Sovereign Immunity

[8] Legal Cultures

3.14 Illiquidity of Equity Investment

3.15 Freezing or Blocking Orders

3.16 Export Prohibitions

3.17 Price Controls and Regulation

3.18 Commercial or Political - It May Be Both

CHAPTER FOUR. PROJECT FINANCE COMMERCIAL RISKS

4.01 Introduction to Commercial Risks

[1] Probability of Risk Evolving Into a Project Problem

[2] Due Diligence

[3] Feasibility Study in Risk Identification

[4] Categories of Commercial Risk

4.02 Credit Risks

4.03 Increase in Construction Costs

4.04 Delay in Completion

4.05 Force Majeure in Construction Contracts

4.06 Experience and Resources of Contractor

4.07 Building Materials

4.08 Facility Site

4.09 Technology

4.10 Construction of Related Facilities

4.11 Shortfalls in Mineral Reserves

4.12 Raw Material Supply and Utilities

4.13 Creditworthiness of Off-Take Purchaser

4.14 Market for Product or Service

4.15 Shortfalls in Anticipated Capacity, Output, and Efficiency

4.16 Operator Experience

4.17 General Operating Expenses

4.18 Sponsor Commitment

4.19 Management Experience

4.20 Permits and Licenses

4.21 Political Environment

4.22 Interest Rate.

4.23 Force Majeure

4.24 Economic Projection and Feasibility Report Inaccuracy

4.25 Environmental

4.26 Contract Mismatch

4.27 Contract Risks Generally

4.28 Commercial Risk Mitigation

[1] Construction Period Risk Mitigation

Contractual Undertakings

Contingency Reserve Funds and Equity and Other Funding Commitments

Insurance

[2] Operation Period Risk Mitigation

Contractual Arrangements

Contingency Reserve Funds

Cash Traps

PART THREE. PROJECT FINANCE STRUCTURES

CHAPTER FIVE. PROJECT FINANCE PARTICIPANTS AND THEIR ROLES

5.01 Project Sponsor

5.02 Project Company

5.03 Borrowing Entity

5.04 Commercial Lender

[1] Arranging Bank

[2] Managing Bank

[3] Agent Bank

[4] Engineering Bank

[5] Security Agent

5.05 Bondholders

5.06 International (Multilateral) Agencies

5.07 Bilateral Agencies

5.08 Rating Agency

5.09 Supplier

5.10 Output Purchaser

5.11 Contractor

5.12 Operator

5.13 Financial Advisor

5.14 Technical Consultants

5.15 Project Finance Lawyers

5.16 Local Lawyers

5.17 Host Government

5.18 Insurers

CHAPTER SIX. PROJECT FINANCE STRUCTURES

6.01 Generally

6.02 Commercial Loan Financing

[1] Construction Phase

[2] Operations Phase

6.03 Export Credit Financing

[2] Types of Export-Import Financing

Direct Lending

Financial Intermediary Loans (Bank-to-Bank)

Interest Rate Equalization

6.04 Lease Financing

[2] Advantages to the Project Company

Control Over the Project

Total Financing

Lower Financing Costs

Tax Deductibility of Rent

Shifting of Residual Risk

Equity Risk Taker Replaces Lender as Financing Source

[3] Lease Financing From the Lessor's Perspective.

6.05 Bond Financing.

Notes:

Description based on publisher supplied metadata and other sources.

Part of the metadata in this record was created by AI, based on the text of the resource.

ISBN:

90-04-50225-4

OCLC:

1528963877