Thursday, July 30, 2015

#TBT: Mexico: The Morning After



This post is part of an occasional series highlighting a project finance article or news item from the past. It is often interesting and thought provoking to look back on these items with the perspective of months, years or decades of further experience. This article first appeared in the March 1999 issue of the Project Finance NewsWire and was written by the late John B. O' Sullivan, a former Chadbourne partner.

Mexico: The Morning After

By John B. O'Sullivan, in Washington

Mexico has been attracting a lot of attention from independent power plant developers recently, both in bidding on requests for proposals from the national utility, the CFE, and in pursuing inside-the-fence projects.
The announcement by President Zedillo last month that the government intended to restructure the electric industry so as to greatly enhance the opportunities for foreign investors and operators seemed at first blush as though it would only further increase that number of players and scope of interest by developers and, therefore, lenders, even in the face of volatile Latin American financial      markets. However, a better appreciation of the difficulty of the process on which the government is embarking, aggravated by the opposition to the plan by some important forces in Mexico, and a reflection on how a good plan for the long run may complicate matters in the short run have somewhat tempered the reaction of many developers and other observers inside and outside of Mexico.

Thursday, July 23, 2015

#TBT: Financing Projects with Unproven Technologies



This post is part of an occasional series highlighting a project finance article or news item from the past. It is often interesting and thought provoking to look back on these items with the perspective of months, years or decades of further experience. This article first appeared in the November 2006 issue of the Project Finance NewsWire.


Financing Projects with 
Unproven Technologies

Many new projects are coming to the market for financing after a lull of several years. The next wave of new construction is not like the boom years of the 1980s and 1990s when most large transactions in the project finance market involved power plants that burned either natural gas or coal and used proven technologies. Many more technologies are competing for attention in the current market. Projects that involve new ways of making transportation fuels or generating electricity or that rely on equipment that does not have a long operating history can be severely challenging to finance. 
  Four veterans of the project finance market discussed the challenges facing such projects in October. The panelists are Herb Magid, managing partner of Energy Investors Funds, a group of six private equity funds that has been a source of capital for many smaller project developers, John McKenna, managing director of Hamilton Clark & Co., an investment bank that helps smaller companies raise capital and list on the AIM market in London, Jerome Peters, senior vice president and group head of project finance for TD Banknorth, N.A., a prominent lender in the renewable energy and biofuels markets, and Paul Ho, director of global energy at Credit Suisse, which has been acting as the financial adviser on many innovative financings. The moderator is Keith Martin with Chadbourne in Washington.

Thursday, July 16, 2015

#TBT: US Congress Throws Tax Benefits At Project Finance Community

This post is part of an occasional series highlighting a project finance article or news item from the past. It is often interesting and thought provoking to look back on these items with the perspective of months, years or decades of further experience. This article first appeared in the September 1999 issue of the Project Finance NewsWire.

US Congress Throws Tax Benefits At Project Finance Community

by Keith Martin, in Washington

Congress left Washington in early August after passing a $792 billion tax-cut bill with many provisions that are of interest to the project finance community. The bill faces a certain veto by President Clinton.

The real question is whether Republican Congressional leaders and the president will negotiate a smaller tax cut in the fall. If so, then the bill Congress passed will serve as a high-water mark for the negotiations. Here is what is in it that would affect companies involved in power, telecoms, toll roads and other infrastructure projects.