Eurotunnel project finance case study

Acknowledgments

Chapter 1: What Is Project Financing? What is Project Financing? A Historical Perspective Requirements for Project Financing Appropriateness of Project Financing An Example Conclusion

Chapter 2: The Rationale for Project Financing Prior Studies' Explanations The Need for Contracts The Advantages of Separate Incorporation Countering the Underinvestment Problem Reallocating Free Cash Flow Reducing Asymmetric Information and Signaling Costs More Efficient Structuring of Debt Contracts More Effective Corporate Organization and Management

Compensation Project Financing versus Direct Financing Advantages of Project Financing Disadvantages of Project Financing Conclusion

Chapter 3: What Is Special about Large Projects? How Large Are “Large” Projects? Length of Project Contracts Initial Project Capital Structure Why Studying Project Finance Is Useful Why Study How Large Projects Are Financed? Conclusion

Chapter 4: Who Finances Large Projects? Sources of Funds for Large Projects Project Bonds' Default Risk Lead Arrangers, Managing Underwriters, and Advisors Conclusion

Chapter 5: Analyzing Project Viability Technical Feasibility Economic Viability Creditworthiness Conclusion as to Viability Assessing Project Risks Completion Risk Technological Risk Raw Material Supply Risk Economic Risk Operating Risk

Financial Risk Currency Risk Political Risk Environmental Risk Force Majeure Risk Implications for Project Financing The Cogeneration Project Conclusion

Chapter 6: Analysis and Financing of Renewable Energy Projects What Is Special About Renewable Energy Projects? International Standards for Promoting Environmentally and Socially Responsible Investing Evaluating the Viability of a Renewable Energy Project Example: The La Confluencia Hydroelectric Power Project The La Confluencia Hydroelectric Power Project and Responsible Investing Operating Risk Conclusion

Chapter 7: Designing Security Arrangements Purpose of Security Arrangements Direct Security Interest in Project Facilities Security Arrangements Covering Completion Security Arrangements Covering Debt Service Types of Purchase and Sale Contracts Raw Material Supply Agreements Supplemental Credit Support Insurance The Cogeneration Project Conclusion

Chapter 8: Structuring the Project Undivided Joint Interest Corporation Partnership Limited Liability Company The Cogeneration Project Conclusion

Chapter 9: Preparing the Project Financing Plan General Considerations Construction Financing Long-Term Financing Withholding Tax Considerations Estimating the Borrowing Capacity of a Project Loan Repayment Parameters Borrowing Capacity, Assuming Full Drawdown Immediately Prior to Project Completion Borrowing Capacity, Assuming Periodic Loan Drawdowns Application to a Hypothetical High-Speed Rail Project Annual Coverage Tests Conclusion

Chapter 10: Discounted Cash Flow Analysis Incremental After-Tax Cash Flows The Hurdle Rate Estimating the Cost of Capital for a Project Net Present Value Analysis Internal Rate of Return Analysis Comparing IRR and NPV Analyses Conclusion

Chapter 11: Financial Modeling and Project Evaluation Preparing Cash Flow Projections Preparing Projected Financial Statements Evaluating a Project's Debt Capacity Measuring Expected Rates of Return Sensitivity Analysis Conclusion

Chapter 12: Using Real-Options Analysis to Evaluate a Project Description of the Oil Field Project Project's Real Options Evaluating the Project Traditional DCF Analysis Sensitivity of Option Value to Oil Price Volatility and to Reserve Dispersion Conclusion

Chapter 13: Sources of Project Funds Equity Long-Term Debt Market Commercial Bank Loans Fixed-Rate Debt Market International Capital Market Supplier Credits Governmental Assistance World Bank Loans Inter-American Development Bank Local Sources of Capital Conclusion

Chapter 14: Managing Project Risks

Interest-Rate Swaps Credit Default Swaps Options Forwards and Futures Hedging Hedging with Options Hedging Foreign Exchange Risk Conclusion

Chapter 15: Sharia-Compliant Project Financing What Is Islamic Finance? Islamic Financial Instruments Islamic Derivatives Example: The Saudi Chevron Petrochemical Project The Future of Islamic Project Finance Conclusion

Chapter 16: Issues for the Host Government Contribution to the Host Jurisdiction's Economic Development Host Jurisdiction's Expected Economic Return Impact on the Availability of Hard Currency Exposure of the Host Government to the Project's Obligation to Repay Project Debt Avoiding Undesirable Precedents Hibernia Oil Field Project Public–Private Infrastructure Partnerships Public–Private Financing Structures Legislative Provisions that Can Affect Public–Private Partnerships Conclusion

Chapter 17: Case Study: The Indiantown Cogeneration Project

Project Description The Partnership and the Sponsors of the Project Principal Project Contracts Projected Operating Results Project Financing Conclusion

Chapter 18: Case Study: The Tribasa Toll Road Project The Mexican Government's Toll Road Program Infrastructure Financing Alternatives Risk Considerations in Foreign Infrastructure Projects Tribasa Toll Road Trust 1 Financing Credit Analysis Risk Minimization Features Conclusion

Chapter 19: Case Study: The Euro Disneyland Project Introduction Project Description Disney Project Ownership Structure Master Agreement with the French Government Project Financing Interests of the Participants in the Project Financial Projections Valuation Corporate Governance Issues Operating Results Subsequent Developments Conclusion

Chapter 20: Case Study: The Eurotunnel Project

Historical Background The Eurotunnel System Project Ownership Structure Construction Project Financing Economic Risk Projected Financial Results Project Debt Financing Project Equity Financing Sensitivity Analysis Subsequent Developments Conclusion