On project finance and the first road concession in Portugal

In broad sense, Project Financing1 as a mean of financing large scale infrastructural projects worldwide has had a steady growth in popularity for the last 20 years. This growth has been relatively unscathed from most economic cycles. However in the wake of the 2007 systemic Financial Crisis, Project Financing was also in trouble. The liquidity freeze and credit crunch that ensued affected all parties involved. Traditional Lenders, of this type of financial instrument, locked-in long-term contractual obligations, were severely hit with scarcity of funding compounded by rapidly increasing cost of funding. All the while, Banks were “rescued” by the concerted actions of Central Banks and other Multi-Lateral Agencies around the world but at the same time “stressed” by upcoming regulatory effort (Basel Committee). This impact resulted in specific changes to this type of long-term financing. Changes such as Commercial Banks’ increased risk aversion; pricing increase and maturities decrease of credit facilities; enforcement of Market Disruption Event clauses; partial responsibility for project risk by Multilateral Agencies; and adoption of utility-like availability payments in other industrial sectors such as transportation and even social infrastructure. To the extent possible, this report is then divided in three parts. First, it begins with a more instructional part, touching academic literature (theory) and giving the Banks perspective (practice), but mostly as an overview of Project Finance for awareness’ sake. The renowned Harvard Business School professor – Benjamin Esty, states2 that Project Finance is a “relatively unexplored territory for both empirical and theoretical research” which means that academic research efforts are lagging the practice of Project Finance. Second, the report presents a practical case regarding the first Road Concession in Portugal in 1998 ending with the lessons learned 10 years after Financial Close. Lastly, the report concludes with the analysis of the current trends and changes to the industry post Financial Crisis of the late 2000’s. To achieve this I’ll reference relevant papers, books on the subject, online articles and my own experience in the Project Finance Department at a major Portuguese Investment Bank. Regarding the latter, with the signing of a confidentiality agreement, I’m duly omitting sensitive and proprietary bank information.

Comparison of recent toll road concession transactions in the United States and France

Recent concessions in France and in the US have resulted in a dramatic difference in the valuation placed on the toll roads; the price paid by the investors in France was twelve times current cash flow whereas investors paid sixty times current cash flow for the U.S. toll roads. In this paper we explore two questions: What accounts for the difference in these multiples, and what are the implications with respect to the public interest. Our analysis illustrates how structural and procedural decisions made by the public owner affect the concession price. Further, the terms of the concession have direct consequences that are enjoyed or borne by the various stakeholders of the toll road.

Are Public Private Partnerships that Rigid ? And Why ? : Evidence from Toll Road Concession Contracts

Transport concession contracts are commonly said to be standardized and too rigid. They would not allow public authorities to adapt them to evolving context and circumstances. This paper aims at challenging this view and, more particularly, the view that contractual rigidity for transport concessions is exogenous. Using a transaction cost framework, we disentangle between three main determinants of contractual rigidity: traffic uncertainty; connivance between contracting parties; quality of the institutional environment. Using an original database of toll road concession contracts, we observe a great variety of provisions for toll adjustment. We find that these exogenous determinants significantly influence contractual choices.

Microfacies analysis of the lower paleocene beda formation in Western Concession 59 and Block 59F, Sirte Basin, Libya /

The rock sequence of the Tertiary Beda Formation of S. W. concession 59 and 59F block in Sirte Basin of Libya has been subdivided into twelve platformal carbonate microfacies. These microfacies are dominated by muddy carbonates, such as skeletal mudstones, wackestones, and packstones with dolomites and anhydrite. Rock textures, faunal assemblages and sedimentary structures suggest shallow, clear, warm waters and low to moderate energy conditions within the depositional shelf environment. The Beda Formation represents a shallowing-upward sequence typical of lagoonal and tidal flat environments marked at the top by sabkha and brackish-water sediments. Microfossils include benthonic foraminifera, such as miliolids, Nummulites, - oerculina and other smaller benthonics, in addition to dasycladacean algae, ostracods, molluscs, echinoderms, bryozoans and charophytes. Fecal pellets and pelloids, along with the biotic allochems, contributed greatly to the composition of the various microfacies. Dolomite, where present, is finely crystalline and an early replacement product. Anhydrite occurs as nodular, chickenwire and massive textures indicating supratidal sabkha deposition. Compaction, micr it i zat ion , dolomit izat ion , recrystallization, cementation, and dissolution resulted in alteration and obliteration of primary sedimentary structures of the Beda Formation microfacies. The study area is located in the Gerad Trough which developed as a NE-SW trending extensional graben. The Gerad trough was characterized by deep-shallow water conditions throughout the deposition of the Beda Formation sediments. The study area is marked by several horsts and grabens; as a result of extent ional tectonism. The area was tectonically active throughout the Tertiary period. Primary porosity is intergranular and intragranular, and secondary processes are characterized by dissolution, intercrystalline, fracture and fenestral features. Diagenesis, through solution leaching and dolomitization, contributed greatly to porosity development. Reservoir traps of the Beda Formation are characterized by normal fault blocks and the general reservoir characteristics/properties appear to be facies controlled.

Morrey's Farmers and Business Directory, Containing the Following Valuable Information: The Name, with the Post Office Address, Lot and Concession, of each Farmer; also whether a Freeholder or a Tenant (1884/85)

The Union Publishing Co.'s farmers' and business directory for the counties of Haldimand, Lincoln, Welland & Wentworth.