Topic: Finance & funding

By Jonathan Norman
April 14th 2016

Foreign Investment in the UK Highlight Report

“The scale of foreign investment is a huge success story which shows that Britain is the place to do business.” Prime Minister David Cameron (2015).

In recent years the UK has seen significant growth in attracting Foreign Direct Investment (FDI), and has been ranked fourth globally in a recent report . It now lags behind only the US, China and India as an investment destination, with a record number of 887 FDI projects in 2014 creating over 30,000 jobs.

This is a nationwide phenomenon. We are seeing investment spread from outside of London and the South East across other key regions in the UK. With the need to improve connectivity between the great cities of the north confirmed as one of the initial focuses of the National Infrastructure Commission, and the “Northern Powerhouse” initiative attracting huge levels of industry interest and political support, this trend towards decentralisation is only likely to accelerate.

Foreign investors are looking for financial strength, a stable political environment, a predictable regulatory regime, and a solid commitment to long term infrastructure development. Chinese investment is already a reality in the nuclear sector at Hinkley Point, and in transport HS2 is now on their agenda. There is also significant investment from Qatar, Saudi Arabia, Malaysia and Korea in the UK real estate market, across projects including Nine Elms, Battersea Power Station and Manchester Place.

But there is no room for UK plc to be complacent.

During this seminar, we will:

• consider whether the UK is doing enough to attract investment;
• discuss trends and objectives among investors from the Middle East, Asia and elsewhere;
• predict future activity in the market; and
• ask what all this means for your business, in terms of both challenges and opportunities.

By Jonathan Norman
April 14th 2016

Foreign Investment in the UK Full Report

“The scale of foreign investment is a huge success story which shows that Britain is the place to do business.” Prime Minister David Cameron (2015).

In recent years the UK has seen significant growth in attracting Foreign Direct Investment (FDI), and has been ranked fourth globally in a recent report . It now lags behind only the US, China and India as an investment destination, with a record number of 887 FDI projects in 2014 creating over 30,000 jobs.

This is a nationwide phenomenon. We are seeing investment spread from outside of London and the South East across other key regions in the UK. With the need to improve connectivity between the great cities of the north confirmed as one of the initial focuses of the National Infrastructure Commission, and the “Northern Powerhouse” initiative attracting huge levels of industry interest and political support, this trend towards decentralisation is only likely to accelerate.

Foreign investors are looking for financial strength, a stable political environment, a predictable regulatory regime, and a solid commitment to long term infrastructure development. Chinese investment is already a reality in the nuclear sector at Hinkley Point, and in transport HS2 is now on their agenda. There is also significant investment from Qatar, Saudi Arabia, Malaysia and Korea in the UK real estate market, across projects including Nine Elms, Battersea Power Station and Manchester Place.

But there is no room for UK plc to be complacent.

During this seminar, we will:

• consider whether the UK is doing enough to attract investment;
• discuss trends and objectives among investors from the Middle East, Asia and elsewhere;
• predict future activity in the market; and
• ask what all this means for your business, in terms of both challenges and opportunities.

By Jonathan Norman
September 17th 2014

32nd Annual Conference, Making Major Projects Bankable Full Report

Over recent years a comprehensive understanding of project finance and funding has become vital for Major Project Sponsors, Clients and Programme Directors. In the article “Investing in Infrastructure, the Trillion Dollar Gap” in the March 2014 Economist, it was suggested that enhancing the ‘professionalism’ of project initiation and delivery was key to addressing the gap in investment; “every country needs a competent group of (sponsors / programme directors) who have the authority and skills to design a pipeline of viable infrastructure deals and the political clout to standardise procurement procedures and other practicalities of getting a road built or a tunnel dug”.

Understanding the various means by which private finance may be obtained is equally relevant to large infrastructure and railway projects. The options for equity and debt financing sources, finance solutions and potential contractual structures have been evolving to meet the growing demand for major project finance at a time when the appetite of traditional financing sources has been curtailed.

In a similar manner to our evening debate in March “What is the true value of major projects”, we want to explore/debate “Making Major Projects Bankable” at this year’s MPA Annual Conference. As an outcome from the conference, we want to understand the scope of ‘project finance understanding’ that major project Sponsors, Clients and Programme Directors will need to develop to ensure that their projects are ‘bankable’ (i.e., their projects will attract and secure appropriately priced finance and funding solutions when required). The conference will share ideas, solutions and experiences of project finance, including: financing structures (e.g., equity, debt, leases and bonds), funding mechanisms (e.g., off-take agreements, tolls, local taxes and utility bills), contractual mechanisms (e.g., PF2 and Regulated Asset Base) and the role of ratings agencies (e.g., Moody’s Investors Service Ltd). Further, we will explore the implications for the supply chain of non-recourse project finance arrangements as the liquidated damages and bonding aspects are much more demanding than those of traditional arrangements to ensure that they are best able to structure their proposals to be attractive to those providing debt/equity.

There is limited availability on this overnight conference – if you would like to attend for the 24hrs or on Wednesday 17th September or Thursday 18th September only please contact the MPA office 01865 338373.

By Jonathan Norman
September 17th 2014

32nd Annual Conference, Making Major Projects Bankable Highlight Report

Over recent years a comprehensive understanding of project finance and funding has become vital for Major Project Sponsors, Clients and Programme Directors. In the article “Investing in Infrastructure, the Trillion Dollar Gap” in the March 2014 Economist, it was suggested that enhancing the ‘professionalism’ of project initiation and delivery was key to addressing the gap in investment; “every country needs a competent group of (sponsors / programme directors) who have the authority and skills to design a pipeline of viable infrastructure deals and the political clout to standardise procurement procedures and other practicalities of getting a road built or a tunnel dug”.

Understanding the various means by which private finance may be obtained is equally relevant to large infrastructure and railway projects. The options for equity and debt financing sources, finance solutions and potential contractual structures have been evolving to meet the growing demand for major project finance at a time when the appetite of traditional financing sources has been curtailed.

In a similar manner to our evening debate in March “What is the true value of major projects”, we want to explore/debate “Making Major Projects Bankable” at this year’s MPA Annual Conference. As an outcome from the conference, we want to understand the scope of ‘project finance understanding’ that major project Sponsors, Clients and Programme Directors will need to develop to ensure that their projects are ‘bankable’ (i.e., their projects will attract and secure appropriately priced finance and funding solutions when required). The conference will share ideas, solutions and experiences of project finance, including: financing structures (e.g., equity, debt, leases and bonds), funding mechanisms (e.g., off-take agreements, tolls, local taxes and utility bills), contractual mechanisms (e.g., PF2 and Regulated Asset Base) and the role of ratings agencies (e.g., Moody’s Investors Service Ltd). Further, we will explore the implications for the supply chain of non-recourse project finance arrangements as the liquidated damages and bonding aspects are much more demanding than those of traditional arrangements to ensure that they are best able to structure their proposals to be attractive to those providing debt/equity.

There is limited availability on this overnight conference – if you would like to attend for the 24hrs or on Wednesday 17th September or Thursday 18th September only please contact the MPA office 01865 338373.

By Jonathan Norman
September 17th 2014

32nd Annual Conference, Making Major Projects Bankable Short Report

Over recent years a comprehensive understanding of project finance and funding has become vital for Major Project Sponsors, Clients and Programme Directors. In the article “Investing in Infrastructure, the Trillion Dollar Gap” in the March 2014 Economist, it was suggested that enhancing the ‘professionalism’ of project initiation and delivery was key to addressing the gap in investment; “every country needs a competent group of (sponsors / programme directors) who have the authority and skills to design a pipeline of viable infrastructure deals and the political clout to standardise procurement procedures and other practicalities of getting a road built or a tunnel dug”.

Understanding the various means by which private finance may be obtained is equally relevant to large infrastructure and railway projects. The options for equity and debt financing sources, finance solutions and potential contractual structures have been evolving to meet the growing demand for major project finance at a time when the appetite of traditional financing sources has been curtailed.

In a similar manner to our evening debate in March “What is the true value of major projects”, we want to explore/debate “Making Major Projects Bankable” at this year’s MPA Annual Conference. As an outcome from the conference, we want to understand the scope of ‘project finance understanding’ that major project Sponsors, Clients and Programme Directors will need to develop to ensure that their projects are ‘bankable’ (i.e., their projects will attract and secure appropriately priced finance and funding solutions when required). The conference will share ideas, solutions and experiences of project finance, including: financing structures (e.g., equity, debt, leases and bonds), funding mechanisms (e.g., off-take agreements, tolls, local taxes and utility bills), contractual mechanisms (e.g., PF2 and Regulated Asset Base) and the role of ratings agencies (e.g., Moody’s Investors Service Ltd). Further, we will explore the implications for the supply chain of non-recourse project finance arrangements as the liquidated damages and bonding aspects are much more demanding than those of traditional arrangements to ensure that they are best able to structure their proposals to be attractive to those providing debt/equity.

There is limited availability on this overnight conference – if you would like to attend for the 24hrs or on Wednesday 17th September or Thursday 18th September only please contact the MPA office 01865 338373.

By Jonathan Norman
January 22nd 2014

Managing Sophisticated R&D projects (across the sectors) Full Report

Managing and running ‘ordinary’ major projects to cost, time and quality outcomes is difficult enough, but managing research projects brings its own set of challenges.

The purpose of this seminar is to understand best protocols for controlling staged progression and subsequent development, to learn from differing sectors how the investment decisions are determined, and to get up to date knowledge on key research programmes.

Although the topic is focussed on R&D, it is intended that some key learning points will prove valuable to controls and interventions on more conventional major projects, especially in their feasibility and developmental stages.

If the purpose of the research project and its subsequent development is to extend current knowledge and capability, then by definition the duration and cost (investment) have to be estimates rather than accurate. Equally, the desired benefits may prove to be unachievable or even have to be extended if competitors gain ground. In these circumstances how are major R&D research projects conducted and controlled?

This seminar will provide valuable insights to the Government’s positive investment and challenges to enhance major R&D, as well as providing an understanding of both the vital role that academia plays and the international nature of these programmes.

By Jonathan Norman
October 8th 2013

Infrastructure Economy – Accelerating Major Projects Full Report

The 2013 Budget placed emphasis on the important role that economic infrastructure can play in providing an early boost to growth of the UK economy. The challenge for MPA members is find ways in which major projects already in a pipeline of activity can be more quickly brought to market and for the build phase to begin. Other projects slightly later in their phasing could bring benefits from increased expenditure on the initiation stage through employment of consultants and other professionals to hasten the award of contracts earlier than otherwise would have been the case.

The Chairman for this half day afternoon seminar is Alan Couzens, a Director at Infrastructure UK. This body sits within UK Treasury and therefore the chair is in a direct line to provide thoughts and advice, as well as take back to Government the outcomes from the seminar.
Economic infrastructure is described as those major projects which directly benefit the economic activity of government and businesses. In addition to civil engineering projects, other forms of economic infrastructure include major IT programmes, defence and broadband and other relevant media channels.

The focus of the seminar will be on the tension of obtaining a quick start of projects in the pipeline whilst recognising that major projects traditionally need sophisticated and longish lead times. Can our industries rise the challenge and provide useful suggestions to speed this process in response to the requirements laid down in the budget?

By Jonathan Norman
May 16th 2013

Delivering Major Projects in Brazil Full Report

In the last 10 years infrastructure investment in Brazil has tripled, reaching $100 billion in 2012. The demands of the economic expansion, the income growth of Brazilians and the social inclusion process have forced the country to accelerate its infrastructure development particularly in the area of logistics and energy. The Government’s Accelerated Growth Program (Programa de Aceleração de Crescimento, PAC) allocated an estimated $800bn to Brazil’s public infrastructure sector between 2008 and 2013. PAC2 continued this rate of investment in major projects. In 2012, in response to these pressing demands, President Dilma Rousseff launched the Logistics Investment Program designed to work with the private sector in order to renew and integrate the transportation network.

Between March and September 2013 the Government will make concession auctions for 7,500 km of highways, 10,000 km of railways as well as extra airport and port capacity. 2013 also sees further bidding rounds for oil and gas, as well as hydropower and wind-power projects and the installation of 23,200 km of electricity transmission lines. The EPL – Brazilian Planning and Logistics Company – which has been set up to deliver these projects – has the largest portfolio of infrastructure projects in the world.

Additionally this year, the Government has (re)scheduled the concession auction for the country’s first high speed railway to connect Rio de Janeiro, Saão Paulo and Campinas – 511 km in length. The country is also in the spotlight as it delivers the 2014 World Cup and 2016 Olympic Games.

These are all good news, but the intended infrastructure boost is coming at a time in which the Brazilian economy is slowing down and the supply chain for major projects is stretched to its limits. This will affect projects and pose corporate, finance and legal challenges to employers and contractors involved in delivering projects in Brazil in the coming years.

This full day seminar will offer an insight into this huge undertakings and how the public and private sectors are planning to deliver these projects and deal with related risks. HM Consul General for Rio de Janeiro, Paula Walsh, will Chair the day bringing her own experience of how Rio is gearing up for the 2016 Games. Experts will set the scene and give the funder’s perspective; and British and Brazilian nationals will share their own experiences of working on transport, energy and other major projects.

This seminar is aimed at those hoping to help deliver these projects as well as those hoping to learn from project professionals around the world about how they do things differently. Delegates attending this event will leave with:

A clear overview of the pipeline of major projects in Brazil
An understanding of how major projects are delivered differently compared to the UK
A “warts and all” view of the challenges of delivering major projects in Brazil

By Jonathan Norman
September 6th 2012

Delivering Public Projects – What is best practice? Full Report

Public Projects are best defined as those that fall within the responsibility of the Major Projects Authority and are generally those within the oversite of central government at both an individual and a portfolio level. Major Projects Authority is a relatively new collaboration, (circa April 2011), between the Cabinet Office, HM Treasury and Departments with the fundamental aim of significantly improving the delivery success rate of Major Projects across central government. Major Projects Authority is mandated to develop the Governments Major Projects Portfolio in collaboration with government departments to provide Integrated Assurance and Approval Plans for each Major Project or Programme and to carry out Starting Gate Review, or equivalent, for all new Projects/Programmes.

David Pitchford the Head of the Major Projects Authority (our Chair for the day) has four main responsibilities. Managing The Governments Major Projects Portfolio, Integrating Assurance and Approvals, Ensuring that Consequential Assurance and Intervention happens in a timely manner and providing Transparent Reporting. We are fortunate to have heard already from Ian Watmore at the beginning of 2011 ‘Identifying and Managing Project Success’ (the topic of an event Seminar No 161 is available on the website) when he outlined the journey for Major Projects Authority and in September 2011 – ‘Productivity Challenge for Trans-formational Change Programmes’ (the topic of our 29th Annual Conference is available on the website), when collectively we had an update from the Major Pro-jects Authority and Infrastructure UK.
Based on the requirements of Central Government Departments and the National Infrastructure Plan 2011, the Infrastructure Cost Review, and the influence of the 2012 Budget we will understand how the Pipeline and long-term ambitions for each sector are developing and how that will transfer through to the Major Projects Portfolio leading to successful and timely delivery. Underpinning this will be a clear understanding on the route to procurement and the necessary funding mechanisms that will have to be in place to make this happen.

By Jonathan Norman
May 12th 2011

The challenges of delivering renewable energy projects – using examples of offshore wind Full Report

Delivering Renewable Energy projects, especially those in an off-shore location has been with us for a number of years. Whilst not just limiting this to Wind Farms specifically, there are a number of options that exist which need to be analysed in order to allow the 2020 Carbon Reduction Targets and Vision of Zero Carbon to be achieved. The current energy policy appears not to acknowledge key issues of affordability and funding for renewable energy projects, and yet the scale of wind farms in particular provides new challenges for engineering and financing.

Through the direction of the Chair for the Event, we will see a strong holistic approach in how the National and European suppliers are exploring off-shore resources specifically how the “Source to Customer” issue is being addressed. We will hear from the Chair of the HSE how they intend to set the fundamentals of Policy and Strategy for Safety, this will provide the foundation for all that follows and underpin with a positive intent the way that these types of projects are delivered. Following this, we look again to government through DECC to share current thoughts on the Strategy for Financing and to outline the commercial opportunities that we know are currently being pursued. Pivotal will be the Policy and Strategy for Integration of the new ‘Super Grid’ with the existing National Grid and the author and developer of that Strategy will share his thoughts. Implementation of these projects, both from a technical and commercial viability standpoint is crucial and key messages will be shared to inform the overall analysis and discussion set against the Policies and Strategies that are being established.

Given the sheer scale of these projects (£150bn+), members from all sectors will be involved in the schemes’ development and delivery. Members will take away a very clear and valuable understanding on the current Policies and Strategies that will be in place and more specifically how they can work with this knowledge in positioning their organisations to help drive towards successful outcomes.