This course will use recent transactions involving infrastructure projects (domestic and international) to illustrate the legal techniques and financial issues involved in project development and financing. The course will address case studies involving energy projects, telecom, toll roads, mining, ports, airports, other infrastructure and professional sports facilities. Class discussion will include analysis of how project risk analysis is done and review of key documents used to develop, construct and finance projects. Students will participate in simulated contract negotiation and drafting exercises representing designated parties to a transaction. Coverage will include different sources of financing, including banks, capital markets, ECAs and multinational entities. There will be both a final examination (open-book) and a short drafting exercise that will be graded. Classes 11/12 will be a half-day Special Offsite Negotiation Workshop on a Saturday, for which the class will be divided into groups to negotiate a financing term sheet for a model transaction.
The required course textbook is:
E.R. Yescombe, Principles of Project Finance (London: Academic Press, an imprint of Elsevier, 2014) (2d Edition). Please note that the second edition is materially different from the first edition, and all page number and other references in this syllabus and in the course will be to the second edition.
Additional case studies, such as Henry A. Davis, ed., Project Finance: Practical Case Studies, Second Edition (two volume set: Volume I – Water and Power, and Volume II – Resources and Infrastructure), and other materials not in the above publication will be provided.
The course is based on four major themes and aims to teach students to analyze issues in light of each theme: (i) allocation of risk, (ii) non-recourse or limited recourse arrangements, (iii) effective contract structures, and (iv) financeability. The class will focus on both theory (risk analysis and mitigation) and practice (critiquing and drafting agreements). Both the written assignment and the workshop will focus on practical matters relating to practice issues.