Risk sharing with Multilateral Financial Institutions in infrastructure and energy project financing : effect on capital relief for commercial banks

(Matsukawa and Habeck, 2007) analyse the main instruments for risk mitigation in infrastructure financing with Multilateral Financial Institutions (MFIs). Their review coincided with the global financial crisis of 2007-08, and is highly relevant in current times considering the sovereign debt crisis, the lack of available capital and the increases in bank regulation in Western economies. The current macroeconomic environment has seen a slowdown in the level of finance for infrastructure projects, as they pose a higher credit risk given their requirements for long term investments. The rationale for this work is to look for innovative solutions that are focused on the credit risk mitigation of infrastructure and energy projects whilst optimizing the economic capital allocation for commercial banks. This objective is achieved through risk-sharing with MFIs and looking for capital relief in project finance transactions. This research finds out the answer to the main question: "What is the impact of risk-sharing with MFIs on project finance transactions to increase their efficiency and viability?", and is developed from the perspective of a commercial bank assessing the economic capital used and analysing the relevant variables for it: Probability of Default, Loss Given Default and Recovery Rates, (Altman, 2010). An overview of project finance for the infrastructure and energy sectors in terms of the volume of transactions worldwide is outlined, along with a summary of risk-sharing financing with MFIs. A review of the current regulatory framework beneath risk-sharing in structured finance with MFIs is also analysed. From here, the impact of risk-sharing and the diversification effect in infrastructure and energy projects is assessed, from the perspective of economic capital allocation for a commercial bank. CreditMetrics (J. P. Morgan, 1997) is applied over an existing well diversified portfolio of project finance infrastructure and energy investments, working with the main risk capital measures: economic capital, RAROC, and EVA. The conclusions of this research show that economic capital allocation on a portfolio of project finance along with risk-sharing with MFIs have a huge impact on capital relief whilst increasing performance profitability for commercial banks. There is an outstanding diversification effect due to the portfolio, which is combined with risk mitigation and an improvement in recovery rates through Partial Credit Guarantees issued by MFIs. A stress test scenario analysis is applied to the current assumptions and credit risk model, considering a downgrade in the rating for the commercial bank (lender) and an increase of default in emerging countries, presenting a direct impact on economic capital, through an increase in expected loss and a decrease in performance profitability. Getting capital relief through risk-sharing makes it more viable for commercial banks to finance infrastructure and energy projects, with the beneficial effect of a direct impact of these investments on GDP growth and employment. The main contribution of this work is to promote a strategic economic capital allocation in infrastructure and energy financing through innovative risk-sharing with MFIs and economic pricing to create economic value added for banks, and to allow the financing of more infrastructure and energy projects. This work suggests several topics for further research in relation to issues analysed. (Matsukawa and Habeck, 2007) analizan los principales instrumentos de mitigación de riesgos en las Instituciones Financieras Multilaterales (IFMs) para la financiación de infraestructuras. Su presentación coincidió con el inicio de la crisis financiera en Agosto de 2007, y sus consecuencias persisten en la actualidad, destacando la deuda soberana en economías desarrolladas y los problemas capitalización de los bancos. Este entorno macroeconómico ha ralentizado la financiación de proyectos de infraestructuras. El actual trabajo de investigación tiene su motivación en la búsqueda de soluciones para la financiación de proyectos de infraestructuras y de energía, mitigando los riesgos inherentes, con el objeto de reducir el consumo de capital económico en los bancos financiadores. Este objetivo se alcanza compartiendo el riesgo de la financiación con IFMs, a través de estructuras de risk-sharing. La investigación responde la pregunta: "Cuál es el impacto de risk-sharing con IFMs, en la financiación de proyectos para aumentar su eficiencia y viabilidad?". El trabajo se desarrolla desde el enfoque de un banco comercial, estimando el consumo de capital económico en la financiación de proyectos y analizando las principales variables del riesgo de crédito, Probability of Default, Loss Given Default and Recovery Rates, (Altman, 2010). La investigación presenta las cifras globales de Project Finance en los sectores de infraestructuras y de energía, y analiza el marco regulatorio internacional en relación al consumo de capital económico en la financiación de proyectos en los que participan IFMs. A continuación, el trabajo modeliza una cartera real, bien diversificada, de Project Finance de infraestructuras y de energía, aplicando la metodología CreditMet- rics (J. P. Morgan, 1997). Su objeto es estimar el consumo de capital económico y la rentabilidad de la cartera de proyectos a través del RAROC y EVA. La modelización permite estimar el efecto diversificación y la liberación de capital económico consecuencia del risk-sharing. Los resultados muestran el enorme impacto del efecto diversificación de la cartera, así como de las garantías parciales de las IFMs que mitigan riesgos, mejoran el recovery rate de los proyectos y reducen el consumo de capital económico para el banco comercial, mientras aumentan la rentabilidad, RAROC, y crean valor económico, EVA. En escenarios económicos de inestabilidad, empeoramiento del rating de los bancos, aumentos de default en los proyectos y de correlación en las carteras, hay un impacto directo en el capital económico y en la pérdida de rentabilidad. La liberación de capital económico, como se plantea en la presente investigación, permitirá financiar más proyectos de infraestructuras y de energía, lo que repercutirá en un mayor crecimiento económico y creación de empleo. La principal contribución de este trabajo es promover la gestión activa del capital económico en la financiación de infraestructuras y de proyectos energéticos, a través de estructuras innovadoras de risk-sharing con IFMs y de creación de valor económico en los bancos comerciales, lo que mejoraría su eficiencia y capitalización. La aportación metodológica del trabajo se convierte por su originalidad en una contribución, que sugiere y facilita nuevas líneas de investigación académica en las principales variables del riesgo de crédito que afectan al capital económico en la financiación de proyectos.

Summer deficit irrigation strategies in hedgerow olive orchard cv. ‘Arbequina’: Effect on fruit characteristics and yield.

Maximum production in hedgerow olive orchards is likely not achieved with maximum evapotranspiration over the long-term. Thus, regulated deficit irrigation (RDI) should be considered as a management option. Four irrigation treatments were evaluated during the summer when olive is most drought resistant. Control (CON) was irrigated to maintain the rootzone close to field capacity. Severe water deficit was applied by irrigating 30% CON from end of fruit drop to end July (DI-J) and from end July until beginning of oil synthesis (DI-A). Less severe water deficit was applied during July and August (DI-JA) by irrigating 50% CON. Flowering, fruiting, abscission, fruit development, fresh and dry weight of fruits, and oil production were evaluated. There were not significant differences in number of buds initiated, number of fruits per inflorescence and fruit drop. Oil production was significantly different between irrigation treatments in all experimental years. CON produced more oil and fruit with higher oil% than DI-A and DI-JA. Oil production of DI-J was not significantly reduced compared to CON and oil% was greater. DI-J was the most effective RDI strategy; with 16% less applied water relative to CON average loss in oil production of 8% was not significantly different to CON. While DI-JA saved most water (27%), oil production was reduced by 15%. Greatest loss in oil production (21%) was observed in DI-A with water saving of 22%.

Cup Anemometer's loss of performance due to ageing process, and its effect on Annual energy Production (AEP) estimates

The deviation of calibration coefficients from five cup anemometer models over time was analyzed. The analysis was based on a series of laboratory calibrations between January 2001 and August 2010. The analysis was performed on two different groups of anemometers: (1) anemometers not used for any industrial purpose (that is, just stored); and (2) anemometers used in different industrial applications (mainly in the field—or outside—applications like wind farms). Results indicate a loss of performance of the studied anemometers over time. In the case of the unused anemometers the degradation shows a clear pattern. In the case of the anemometers used in the field, the data analyzed also suggest a loss of performance, yet the degradation does not show a clear trend. A recalibration schedule is proposed based on the observed performances variations

Control by ATR-FTIR of surface treatment of cork stoppers and its effect on their mechanical performance

Fourier transform infrared (FTIR) spectroscopy was applied to determine the type of surface treatment and dose used on cork stoppers and to predict the friction between stopper and bottleneck. Agglomerated cork stoppers were finished with two different doses and using two surface treatments: P (paraffin and silicone), 15 and 25 mg/stopper, and S (only silicone), 10 and 15 mg/stopper. FTIR spectra were recorded at five points for each stopper by attenuated total reflectance (ATR). Absorbances at 1,010, 2,916, and 2,963 cm -1 were obtained in each spectrum. Discriminant analysis techniques allowed the treatment, and dose applied to each stopper to be identified from the absorbance values. 91.2% success rates were obtained from individual values and 96.0% from the mean values of each stopper. Spectrometric data also allowed treatment homogeneity to be determined on the stopper surface, and a multiple regression model was used to predict the friction index (If = Fe/Fc) (R 2 = 0.93)

Laser shock peening without absorbent coating (LSPwC) effect on 3D surface topography and mechanical properties of 6082-T651 Al alloy

The influence of nanosecond laser pulses applied by laser shock peening without absorbent coating (LSPwC) with a Q-switched Nd:YAG laser operating at a wavelength of λ = 1064 nm on 6082-T651 Al alloy has been investigated. The first portion of the present study assesses laser shock peening effect at two pulse densities on three-dimensional (3D) surface topography characteristics. In the second part of the study, the peening effect on surface texture orientation and micro-structure modification, i.e. the effect of surface craters due to plasma and shock waves, were investigated in both longitudinal (L) and transverse (T) directions of the laser-beam movement. In the final portion of the study, the changes of mechanical properties were evaluated with a residual stress profile and Vickers micro-hardness through depth variation in the near surface layer, whereas factorial design with a response surface methodology (RSM) was applied. The surface topographic and micro-structural effect of laser shock peening were characterised with optical microscopy, InfiniteFocus® microscopy and scanning electron microscopy (SEM). Residual stress evaluation based on a hole-drilling integral method confirmed higher compression at the near surface layer (33 μm) in the transverse direction (σmin) of laser-beam movement, i.e. − 407 ± 81 MPa and − 346 ± 124 MPa, after 900 and 2500 pulses/cm2, respectively. Moreover, RSM analysis of micro-hardness through depth distribution confirmed an increase at both pulse densities, whereas LSPwC-generated shock waves showed the impact effect of up to 800 μm below the surface. Furthermore, ANOVA results confirmed the insignificant influence of LSPwC treatment direction on micro-hardness distribution indicating essentially homogeneous conditions, in both L and T directions.

Mixing effect on volume growth of Fagus sylvatica and Pinus sylvestris is modulated by stand density

Despite the increasing relevance of mixed stands due to their potential benefits; little information is available with regard to the effect of mixtures on yield in forest systems. Hence, it is necessary to study inter-specific relationships, and the resulting yield in mixed stands, which may vary with stand development, site or stand density, etc. In Spain, the province of Navarra is considered one of the biodiversity reservoirs; however, mixed forests occupy only a small area, probably as a consequence of management plans, in which there is an excessive focus on the productivity aspect, favoring the presence of pure stands of the most marketable species. The aim of this paper is to study how growth efficiencies of beech (Fagus sylvatica) and pine (Pinus sylvestris) are modified by the admixture of the other species and to determine whether stand density modifies interspecific relationships and to what extent. Two models were fitted from Spanish National Forest Inventory data, for P. sylvestris and F. sylvatica respectively, which relate the growth efficiency of the species, i.e. the volume increment of the species divided by the species proportion by area, with dominant height, quadratic mean diameter, stocking degree, and the species proportions by area of each species. Growth efficiency of pine increased with the admixture of beech, decreasing this positive effect when stocking degree increased. However, the positive effect of pine admixture on beech growth was greater at higher stocking degrees. Growth efficiency of beech was also dependent on stand dominant height, resulting in a net negative mixing effect when stand dominant heights and stocking degrees were simultaneously low. There is a relatively large range of species proportions and stocking degrees which results in transgressive overyielding: higher volume increments in mixed stands than that of the most productive pure pine stands. We concluded that stocking degree is a key factor in between-species interactions, being the effects of mixing not always greater at higher stand densities, but it depends on species composition.

Ion correlations due to high-frequency electric field and their effect on the nonlinear plasma conductivity

The influence of a strong, high‐frequency electric field on the ion‐ion correlations in a fully ionized plasma is investigated in the limit of infinite ion mass, starting with the Bogoliubov‐Born‐Green‐Kirkwood‐Yvon hierarchy of equations; a significant departure from the thermal correlations is found. It is shown that the above effect may substantially modify earlier results on the nonlinear high‐frequency plasma conductivity.

Optimal design of AC EMI filters with damping networks and effect on the systems power factor

The cutoff frequencies of an EMI filter are normally given by the noise attenuation requirements the filter has to fulfill. In order to select the component values of the filter elements, i.e. inductances and capacitances, an additional design criterium is needed. In this paper the effect of the EMI filter input and output impedances are considered. The input impedance influences the filters effect on the system displacement power factor and the output impedance plays a key role in the system stability. The effect of filter element values, the number of filter stages as well as additional damping networks are considered and a design procedure is provided. For this analysis a two-port description of the input filters employing ABCD-parameters is used.

Summer deficit-irrigation strategies in a hedgerow olive cv. Arbequina orchard: Effect on oil quality

En este ensayo se evaluó el efecto del déficit hídrico en el verano en la calidad del aceite de la variedad Arbequina. Para ello se establecieron 3 tratamientos de riego deficitario y un Control en un olivar en seto. El deficit severo aplicado en Julio provocó un incremento en polifenoles comparado con los otros tratamientos.

Summer deficit-irrigation strategies in a hedgerow olive cv. Arbequina orchard: Effect on oil quality

En un olivar en seto de la variedad Arbequina, situado en la Puebla de Montalbán (Toledo), se aplicaron diferentes estrategias de riego deficitario durante el verano. Se evaluó el efecto del riego sobre la calidad del aceite. Los aceite procedentes del tratamiento de deficit severo de julio presentarion una mayor estabilidad oxidativa, lo que coincide con un mayor contenido en polifenoles

Ion-Ion correlations effect on nonlinear high-frequency plasma conductivity. AT(30-1)-1238-MATT-675

On the basis of the BBGKY hierarchy of equations an expression is derived for the response of a fully ionized plasma to a strong, high-frequency electric field in the limit of infinite ion mass. It is found that even in this limit the ionion correlation function is substantially affected by the field. The corrections to earlier nonlinear results for the current density appear to be quite ssential. The validity of the model introduced by Dawson and Oberman to study the response to a vanishingly small field is confirmed for larger values of the field when the eorrect expression for the ion-ion correlations i s introduced; the model by itself does not yield such an expression. The results have interest for the heating of the plasma and for the propagation of a strong electromagnetic wave through the plasma. The theory seems to be valid for any field intensity for which the plasma is stable.

Comparison of different MIMO antenna arrays and user's effect on their performances

Multiple-input multiple-output (MIMO) systems have entailed a great enhancement in wireless communications performances. The use of multiple antennas at each side of the radio link has been included in recent drafts and standards such as WLAN, WIMAX, or DVB-T2. The MIMO performances depend on the antenna array characteristics and thus several aspects have to be taken into account to design MIMO antennas. In the literature, many articles can be found in terms of capacity or antenna design, but in this article, different types of antenna arrays for MIMO systems are measured in a reverberation chamber with and without a phantom as a user's head. As a result, the MIMO performances are degraded by the user in terms of efficiency, diversity gain, and capacity. Omnidirectional antennas such as monopoles with high radiation efficiency offer the highest performance for a rich scattering nonline of sight indoor environment.

Electrical decoupling effect on intermediate band Ti-implanted silicon layers

We investigated the electrical transport properties of ultraheavily Ti-implanted silicon layers subsequently pulsed laser melted (PLM). After PLM, the samples exhibit anomalous electrical behaviour in sheet resistance and Hall mobility measurements, which is associated with the formation of an intermediate band (IB) in the implanted layer. An analytical model that assumes IB formation and a current limitation effect between the implanted layer and the substrate was developed to analyse this anomalous behaviour. This model also describes the behaviour of the function V/Delta V and the electrical function F that can be extracted from the electrical measurements in the bilayer. After chemical etching of the implanted layer, the anomalous electrical behaviour observed in sheet resistance and Hall mobility measurements vanishes, recovering the unimplanted Si behaviour, in agreement with the analytical model. The behaviour of V/Delta V and the electrical function F can also be successfully described in terms of the analytical model in the bilayer structure with the implanted layer entirely stripped.

Cover crops effect on farm benefits and nitrate leaching: Linking economic and environmental analysis.

Introducing cover crops (CC) interspersed with intensively fertilized crops in rotation has the potential to reduce nitrate leaching. This paper evaluates various strategies involving CC between maize and compares the economic and environmental results with respect to a typical maize?fallow rotation. The comparison is performed through stochastic (Monte-Carlo) simulation models of farms? profits using probability distribution functions (pdfs) of yield and N fertilizer saving fitted with data collected from various field trials and pdfs of crop prices and the cost of fertilizer fitted from statistical sources. Stochastic dominance relationships are obtained to rank the most profitable strategies from a farm financial perspective. A two-criterion comparison scheme is proposed to rank alternative strategies based on farm profit and nitrate leaching levels, taking the baseline scenario as the maize?fallow rotation. The results show that when CC biomass is sold as forage instead of keeping it in the soil, greater profit and less leaching of nitrates are achieved than in the baseline scenario. While the fertilizer saving will be lower if CC is sold than if it is kept in the soil, the revenue obtained from the sale of the CC compensates for the reduced fertilizer savings. The results show that CC would perhaps provide a double dividend of greater profit and reduced nitrate leaching in intensive irrigated cropping systems in Mediterranean regions.

Positional Accuracy in Smart-Phones and Its Effect on LBS Applications.

Location-based services (LBS) highly rely on the location of the mobile user in order to provide the service tailored to that location. This location is calculated differently depending on the technology available in the used mobile device. No matter which technology is used, the location will never be calculated 100% correctly; instead there will always be a margin of error generated during the calculation, which is referred to as positional accuracy. This research has reviewed the eight most common positioning technologies available in the major current smart-phones and assessed their positional accuracy with respect to its usage by LBS applications. Given the vast majority of these applications, this research classified them into thirteen categories, and these categories were also classified depending on their level criticality as low, medium, or high critical, and whether they function indoor or outdoor. The accuracies of different positioning technologies are compared to these two criteria. Low critical outdoor and high critical indoor applications were found technologically covered; high and medium critical outdoor ones weren?t fully resolved. Finally three potential solutions are suggested to be implemented in future smartphones to resolve this technological gap: Real-Time Kinematics Global Positioning System (RTK GPS), terrestrial transmitters, and combination of Wireless Sensors Network and Radio Frequency Identification (WSN-RFID).