Product + Services
GPFAC has assembled a distinguished team of Principals to drive its project finance business. This team has closed $125.4 billion in project finance deals worldwide ($35.9 billion in renewable energy alone) in diverse roles as a financial advisor, lender, and project sponsor. We have the experience and bandwidth to offer comprehensive project finance services to support any project finance transaction worldwide.
There are four main factors differentiating GPFAC’s advisory services:
- Industrial experience with industrial companies and major equipment contractors;
- Experience working across the financial services sector in a variety of roles (advisor, underwriter, and equity investor);
- Unique experience with renewable energy; and
- Global presence (US, Europe, Africa, and Asia).
GPFAC Principals get it right the first time, increasing the probability of success and dramatically reducing development time and cost. Financial Advisory Services include:
Project Financial Advisor
- Support negotiation of bankable commercial contracts;
- Develop a bankable security package and financial structure;
- Run the process of obtaining banking commitments;
- Manage the underwriting process on behalf of sponsors; and
- Drive the closing process.
GPFAC can conduct a comprehensive review of a project finance transaction and produce a due diligence report that outlines:
- Critical risks;
- Possible solutions to mitigate these risks; and
- Conclusions and recommendations.
This service can help to drive the closing process by focusing resources on the major deal-breakers from a financing standpoint.
GPFAC has developed a unique scoring methodology to screen projects on a consistent basis, regardless of technology, size, or geographic region. These scores, together with an assessment of the project’s profitability, enable the classification of projects from difficult projects to “low-hanging fruit”.
When applied to a portfolio, this can facilitate rational allocation of resources and guide strategic portfolio decisions, such as acquisition and divestiture.
Listen to a recent podcast that illustrates our approach to project screening and portfolio management:
Project Preparation and Support
GPFAC will support clients and Host Governments in strategy and project preparation to increase the likelihood of attracting institutional investment.
- Review of the policy framework for institutional investment;
- Review of the project documents available to bidders;
- Review of collateral package; and
- Assessment of bankability.
GPFAC’s global experience qualifies it to make such assessments and this facilitates an investor-friendly environment to catalyze infrastructure investments.
GPFAC has teamed up with EIC Partners AG (“EIC”) to strengthen our project development capability. EIC professionals have successfully developed some of the most complex energy infrastructure transactions around the globe. The combined development experience of GPFAC and EIC professionals is strong and broad. For example, some successful projects include: the largest power plant in Morocco, one of the leading CCGT fleets in Italy, thermal plants in Saudi Arabia and Australia, the first IPP projects in Mali, Ivory Coast and India, and the first greenfield reserve power plants in Germany. These projects were always developed in compliance with international standards of project finance and ISO compliant technological solutions.
We are familiar with all relevant development activities and techniques in the different project phases, including: feasibility studies, securing land rights and way leaves, environmental permitting, obtaining zoning rights, EPC and O&M contracts, interconnection agreements, fuel supply and fuel storage arrangements, financial modeling, insurances, loan agreements, as well as off-take agreements for power and heat.
We develop projects in a structured manner. Objectives, budgets and forecasts are defined for different time horizons; achievements and costs are tracked in regular intervals; and critical path items and milestone trend analysis are illustrated for the Sponsor’s benefit.
- Transparent progress and cost reporting.
- Tool set established to monitor project development progress by supervisory bodies.
- Solid basis provided to make “go / no-go” decisions.
Familiar with project finance techniques
We anticipate what professional lenders require prior to lending money on a non-recourse or limited-recourse project finance basis, including systematic risk mitigation, high-quality service and equipment suppliers, financeable contracts (with step-in-rights, direct agreements, meaningful guarantees and remedies), and realistic DSCR projections at relevant levels.
- Project financing becomes an option, implying less capital to be mobilized and a capped exposure towards the project.
- Experience and perspective to allocate risks to parties in the best position to absorb or manage the related exposure.
- As project is shielded against most uncontrollable risks, the asset quality improves from a risk-return perspective.
Our professionals have mastered the art of project development of finding the right balance between progressing deals rapidly on the one hand and spending significant expenditures as late as possible on the other hand. Key success factors include the prioritization of activities and managing third parties effectively.
- Capacity and pacing to overcome challenges along the route towards financial closing even when delays or extensions arise.
- Development capital is spent in a risk-conscious manner.
- Milestone-linked release of development capital provides a good discipline to involved parties and keeps costs within budget.
Sponsor and investor mind-set
The team has an investor mindset with an entrepreneurial DNA. When hurdles initially seem insurmountable, we explore options and new means to bring the project forward. Team members use the experience from being actively involved in numerous investment decisions for projects around the globe.
- Ability to prepare project related information packages for supervisory bodies (Boards, Investment Committee).
- Investment decisions are prepared with consideration to different action options.
- Our professionals are entrepreneurial partners in supporting sponsors along the project development journey.
Utilizing our team experience, we can support clients to overcome challenges in the management of their infrastructure project or portfolio with specific aspects, problems or phases of an investment.
Examples of situations where we can assist include: (i) A development opportunity gets “stuck” at a particular phase. Our professionals can identify the relevant area of action to bring the opportunity forward. (ii) An operating asset may face regulatory, technical or commercial challenges. We support you in determining and implementing pragmatic steps to address the challenge and add value. (iii) Financial markets provide infrastructure investors with attractive refinancing opportunities at certain times. Our finance team can support the investors with realizing these chances and improve the investment return.
We have faced many issues arising in deals as well as management and operational challenges in small to large-sized corporations, and we are sensitive to the concerns of relevant stakeholders.
- Rapid identification of key issues.
- Pragmatic, solution-oriented resolution procedures.
- Focused approach towards stakeholders.
Ability to listen
Before analyzing and acting, we listen. We understand regulatory limitations, targets, and constraints of involved parties.
- Credibility to propose actions.
- Respect in negotiations.
- Authority to implement.
Ability to analyze
We have the capacity and ability to review and understand complex agreements, reciprocal interdependencies and related arising issues. We develop practical and intelligent solutions.
- Proposal of sustainable issue resolutions.
- Credible approach towards stakeholders and their supervisory bodies.
- Well-developed solutions are attained without the need to use or increase fixed overhead costs.
Ability to act
If specified by the client, we take the lead role on an investment or a defined aspect of it. We can act quickly and nimbly because of our streamlined and task-focused approach. We are able to propose a suitable, committed team for the task rapidly.
- No need to build-up resources for special situations.
- Implementation of possibly unpleasant measures by third party.
- Possibility to overcome deadlocked situations by involving fresh, independent team.
Project Finance Models
For projects that are in the development phase, GPFAC has developed a proprietary modeling approach that has gained broad acceptance from developers, project participants, lenders, and international rating agencies. The advantage of this approach is a resulting streamlined project finance model.
This podcast explains our approach to developing sophisticated project finance models from scratch: Financial Model Development PODCAST
What differentiates GPFAC project finance models are the following factors:
- Modeling performed by project finance professionals, not Excel programmers;
- Low risk of mistakes through built-in checks;
- Models meet standards and utilize common parameters;
- Models are of a manageable size; and
- Models are well documented and easy-to-use.
Asset Management Models
GPFAC does not recommend that complex models during the development phase be used to monitor a project during operations because:
- Closing models rarely reflect actual costs because of change orders and Force Majeure events;
- Monitoring models do not need construction financing or loan repayment calculations; and
- Monitoring models focus on ‘actuals’ versus ‘budget’ for the near term.
Therefore, GPFAC works with clients and lenders to develop an easier-to-use monitoring model that meets their reporting needs and also checks compliance with covenants in the loan documents.
Project Finance Training
GPFAC offers a comprehensive credit training program in Project & Structured Finance and Financial Modeling. This program has three components: classroom instruction; experience-based learning (in rotations); and mentoring.
Professional development and training for finance practitioners is important and often undervalued. For more on this theme, you can listen to Mr. Mathur’s insight in this Podcast:
GPFAC has developed a broad range of training modules in the area of Project & Structured Finance, including courses in the following:
- Limited Recourse Project Finance
- Risk Management & Mitigation
- Loan Documentation
- Project Screening
- Global Financing Techniques
- Loan Syndication
- Joint Development Agreement
- Sales Forecasting
GPFAC Principals have been delivering training programs for over 30 years in the US, Canada, Latin America, Western Europe, Eastern Europe, Middle East, Africa, South Asia, and the Far East. The broad range of categories and representative clients includes Industrial Companies (ABB, GE Capital), Government Institutions (US Department of Energy, PDVSA), and Banks and Financial Institutions (EBRD, National Commercial Bank).
GPFAC will custom-tailor a training program based upon an organization’s specific needs. However, GPFAC offers three off-the-shelf workshops that have found broad applicability:
- 2-day workshop in Financial Modeling introduces participants to the building of financial models for complex project finance transactions.
- 3-day workshop in Project Finance offers a unique, broad and detailed business perspective on project finance.
- 4-day workshop in Project Finance and Financial Modeling combines the most essential aspects of the 3-day workshop on Project Finance and the 2-day workshop on Financial Modeling. The Financial Modeling section focuses on using a financial model instead of building one. The content of this workshop has been developed in close coordination with leading commercial banks and industrial companies with the objective of covering project finance and modeling in a 4-day workshop.
What differentiates GPFAC training programs are the following:
- Content is not boiler-plate material downloaded from the Internet
- Focus on real knowledge, practical applications, and tools that can be used on the job
- Realistic and attainable learning objectives
- Emphasis on learning by doing (quizzes, exercises, case studies, simulated negotiation)
- Engaging, animated workshops (nobody falls asleep)
- Instructors are actual project finance and modeling professionals with extensive and current financial closing experience (not academics with limited closing experience)
Experience-Based Learning (EBL)
EBL is an extension of Classroom Instruction that enables rotational employees to gain a practical understanding of other departments in an organization:
- Through short-term assignments (typically of 3-6 months duration).
- Where the objective, over time, is to improve job performance and promote a common credit culture within the organization.
- It is based upon best practices in the industry; and with a detailed framework containing all the administrative tools necessary for implementing a successful program.
Mentoring is the third leg of a comprehensive training program:
- An employee (the “Mentee”) is matched with a Mentor (internal or external) with the objective of facilitating the Mentee’s personal and professional career growth.
- Synergistic with Classroom Instruction and EBL.
- However, the duration of a Mentor-Mentee relationship generally is of a significantly longer duration than an EBL program.
- Benefits to an organization include:
- Better career development of employees,
- Increased retention rates; and
- Higher productivity.
A key challenge is ensuring that the role of the Mentor does not undermine the role of the employee’s supervisor.