Bharat Book Bureau, a leading market information distributor has put forth a report - Rethinking Project Finance: Allocating and Mitigating Risk in Australasian Projects (http://www.bharatbook.com/
Provides valuable insight into methods of project finance. Written by Dr. Nora L. Pcheinkestel, an expert on project finance and winner of the 1996 Banking Law Association Research prize, the book is illustrated with real-life case studies throughtout . Reliable and well researched, it provides a detailed analysis of: the need for project finance; the strengths and weakness of various new methods; changes that ought to be considered to ensure a project’s success; allocation and trading of risks; the role of government; the legal options; the debt – equity conflict; responses to opportunism and moral hazard; and financing arrangements
What is Project Financing
Risk: the core of the project financing project. The parties. Project structures. The process of project finance. The financiers.
The Development of Project Finance
The 1970s: project finance helps maximize Australian ownership. The first oil shock and how project finance helped preserve credit capacity in unstable capital markets. The early 1980s: aggressive lending for Blue Chip sponsors. Project finance and innovation. Coal Wave. Off-balance sheet structures reach new heights. Diamonds and gold and how project finance levelled the playing field among disparate borrowers. The 1990s: project finance and infrastructure.
The Allocation of Risk
The concept of risk. Trading in risks. Multiple parties, multiple objectives. Limitations - the problems of moral hazards. Effects of gearing risk sharing. The role of governement. Ex post adjudication of ex-ante omissions the legal options.
Opportunism and the Debt-Equity Conflict
Long-term contracts: an economic analysis of law approach. Complete contracting and transaction costs. Incomplete contracting and the risk of moral hazards. Opportunism and the debt-equity ratio. The project lender's traditional response to opportunism. Blurring the distinction betweeen debt and equity; legal issues and conflicts.
Risk Allocation and Transaction Costs in Project Financing Documentation
Risk allocation, opportunism and relational contradiction. Transaction costs of project financing arrangements.
The Project Finance Relationship:
Considering the options. Making a start; tackling the issue of pre-contractual transaction costs. Formula incentives for project participants. Effecting real changes: redefining the legal relationship. The institutional investor: a model for project participation.
Conclusion
Looking back/looking forward. Where to from here?
CASE STUDIES OF INNOVATIVE FINANCING TECHNIQUES- Welpa Bauxite. Hammersley Iron. Mt Newman Iron Ore. Bougainville Copper. Greenvale Nickel. Tomago Alumnium Smelter. Oaky Creek Coal. North West Shelf Gas. OK Tedi Copper & Gold. Erang Power Station. Cooper Basin Gas Project. Collinsville Coal. Delhi Transaction Oil. Barrack Silicon. Kaltail Gold. Kutubu Petroleum.
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