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Project structuring is a complicated and systematic process that must be carried out properly to increase the chances of your business’s success. When we talk about projects, we refer to infrastructure, services, retail, and any other project that, as a business, needs structuring, not only to measure its feasibility but also to design actions to provide sustainability over time through the identification of risks and their corresponding mitigation. Experience is key in structuring and we have it.

Within this project structuring process we can assist you with:

1. Conceptualization of the Final Product
2. Premises
3. Comprehensive pre-feasibility
4. Comprehensive feasibility
5. Activity Matrix and Project Planning
6. Project designs
7. Product design
8. Budgeting
9. Financial Modeling and Financial Feasibility
10. Market Studies
11. Economic Feasibility
12. Tariff and pricing structure
13. Legal Structuring
14. Technical and O&M Structuring

Based on the results of the financial feasibility analysis, The Project additionally offers in-depth legal and financial consultancy regarding the regulatory elements that must be considered in the projects.

With our firsthand and proven experience in this type of partnership, all available alternatives are evaluated and a strategy is structured for the potential conditions that the Public-Private Partnership must have for the development of the project, so that it can be a balanced and successful project, viable for the promoter, bankable for potential lenders, and profitable for the private entity.

What does The Project do in a PPP?

Public-Private Partnerships by themselves are neither effective nor sustainable if they are not structured properly. The Project has nearly two decades of practical experience in Delegated Administrations and we have identified certain trends of making mistakes or omissions in the structuring that cost money and time. This is why we help you with:

• Most appropriate legal figure for project execution.
• Analysis of potential regulatory risks.
• Determine the time necessary to grant the contract to ensure bankability and profitability.
• What will be the contributions of the contracting parties, both in investments, costs, and revenues.
• Basis or calculation elements that allow the private party to achieve an adequate return.
• Determine the different guarantees that must be granted by the private party.
• The different types and levels of insurance that must be instituted by the private sector
• Supervision and Fiscalization Mechanism to ensure business continuity.
• Minimum percentages of capital contribution by the private sector.
• Tariff regulation within the contract to protect the project’s viability.
• Potential performance measurement elements within the alliance.
• Potential reserves or financial funds if needed.

What is Project Finance?

It is a project financing mechanism that has been widely used in recent years in many project developments around the world.

What is it used for?

As a source of financing for the different modalities of multimillion-dollar projects, often used in global infrastructure.

The unique aspect of this loan is that it is fully backed by the cash flows the project can produce, making this estimation important for investors and especially for banks that want to provide financing based on how reliable and professional these cash flow estimates are.

This form of structuring financing has a large number of benefits such as:

• Increase the availability of resources.
• Share the risks and returns between the manager and the investors.
• It does not compromise the financial integrity of the managing company.
• Increasing the potential for indebtedness and business growth, among others. 
• Structuring of Project Finance Loans, Documents and Financing Agreements. 
• Credit negotiations.
• Support during the financial closing and compliance with Precedent Conditions.
• Review of the consistency between the financial model and the financial agreements.
• Contact with the most important Multilateral Banks. 
• Review of the project’s financial documents and agreements.
• Monitoring of compliance with financing agreements.

What does Management Monitoring consist of? 

Once the project has been awarded and is in operation, one of the common mistakes in PPPs is not having adequate contract monitoring to ensure that its objectives are achieved over time. Generally, there is no office that is constantly analyzing the delegation’s risks, and for this reason, typical PPP errors are incurred.

Some PPP errors:

• Delays in schedules 
• Lack of approval of certain steps, activities, and/or documents by the State 
• Lack of tariff regulation 
• Renegotiations
• Loss in service level
• Lack of information or reports
• Failure to comply with contractual milestones 

These errors can cost the parties a lot of money, so The Project monitors delivery dates, contractual compliance indices (KPIs), evaluates service levels, identifies and manages risks, tracks the financial model, etc., throughout the duration of the contract, in order to save money for the project.

Why should The Project prequalify my offer? 

Very commonly used in the public sector when several bidders arrive for a project with similar characteristics.

The Project, based on the Qualification Matrix and the results of the Offer Model, can conduct a financial analysis for each proposal and provide a report to the client that includes:

• Results report 
• The risks of each offered scenario
• The comparison between Bidders and the Client’s Objective.

This will serve as technical input for the client to take the best decision.

• Review of the Offer Models
• Comparison of Offers and results
• Risks of the Offers
• Considerations of the Offers
• Qualification of Offers based on the Objective Matrix

The Project has participated as an expert witness in various arbitration processes, such as at the International Center for Conciliation and Arbitration (CICA), providing expert opinions and analyses related to concessions, financial balances, financial modeling, addenda, and others.

What are arbitrations for?

They are characterized by their speed; since the operators are fully dedicated to the case; and because the decision made through awards is akin to a judicial sentence, that is, it has executive merit and becomes res judicata without having to go through a cumbersome trial; additionally, arbitration is administered by an expert certified for these cases.

Likewise, in order for all potential bidders to submit standard-qualifiable proposals, The Project will develop a Financial Offer Model in which each interested company will fill out a series of financial, investment, profitability, revenue, and projection elements.

These inputs will serve our Client to make a real and adequate comparison regarding the offers. Likewise, by using a standard instrument, the results and qualifying variables in all cases are calculated the same way, and therefore the qualification criteria are not subject to distortion and/or interpretation.

In this regard, a Qualification Elements Matrix with its respective weighting based on the client’s preferences will be delivered to the client, along with a Financial Offer Model that will serve as the presentation tool for Financial Offers for all interested parties.

⦁ Development of Financial Model for the Offer

⦁ Qualification Matrix