If 2003 promised a bounce in power prices and more activity in the infrastructure and oil & gas markets according to last year's Foreword, what does 2004 bring? Perhaps a little less luck in off-the-cuff forecasts but as ever the trends for next year have already to some extent been set this year.
Forecasts of a growing need for LNG to meet rising gas demand across virtually the entire globe has the hydrocarbon supermajors scrambling for positions in a diverse and far-flung spread of upstream, midstream and downstream LNG assets. Vertical integration is back in, but rather than a monolithic culture of linear relationships supported by long-term sales agreements, market players speak instead of using a portfolio of assets to maximise rewards and realise synergies across a range of markets. Some even mention the prospect of a global LNG trade. By Daniel O'Sullivan.
In 2003, several of the world's largest and most well-known financial institutions announced their adoption of the Equator Principles, a set of guidelines for use by lenders to ensure projects they finance are developed in a manner that is socially responsible and environmentally sound. The possible implications of this development for global project finance are explored, and guidance is offered on implementation and strategy. By William L. Thomas of Pillsbury Winthrop LLP1.
With the price of natural gas at about US$6/mbtu, on the heels of an average annual price that has remained well above US$5/mbtu, major international oil and gas players have spent the past 12 months advancing plans to expand existing LNG import terminals and to add new receiving capacity on both coasts of the US and Mexico. Demand for gas continues to grow on both sides of the US border. But LNG sponsors and would-be bankers face many challenges, from an uncertain permitting and regulatory environment to the importance of lining up long-term contracts to the possibility that the passage of the US energy bill could chance the gas pricing landscape. By Nicole Gelinas.
The pipeline for financing renewable projects in Australia is looking rosy in the next 12 to 18 months. As with any fledging industry segment though, there are still some key issues to be worked through. By Sharon Klyne.
Wind power has long been a major contributor to European project finance deal flow, but across several markets for much of this year both developers and their bankers were facing some grave uncertainties over their future investment prospects. The good news is that in each case, politicians have just recently responded to give the markets what they said they needed. By Daniel O'Sullivan.
Banks which will qualify for advanced treatment under the new Basel accord should gain favourable regulatory treatment for their project loans. By Chris Beale, Managing Director and Global Head of Project & Structured Trade Finance, Citigroup.
What will the contracts for a Canadian ppp deal look like? With Canadians demanding that the secrecy be taken out of the bidding process and contracts be made public, the market may find out soon. Speakers at the 11th Annual Conference on Public-Private Partnerships offered their recommendations on how to effectively structure the contracts and create a real market. By Alison Healey.
This calendar year has seen a mixed performance regarding the private financing of Australian infrastructure. More toll roads reached closure or contract award, but the number of projects reaching financial close in social infrastructure was disappointing. Bill Banks, partner and David Larocca, director - project finance advisory of Ernst & Young Australia review the developments and identify some overall trends in the financing of Australian infrastructure.
Nigel Jones knows a thing or two about the value of PFI equity and the profit to be made in selling it. He heads the Private Finance unit at the services and contracting firm Carillion, which has begun selling off its PFI assets. He had a spell at Jarvis which typically offloads its PFI equity to institutional investors at financial close, and before Jarvis he built up the PFI portfolio at Hyder, the Welsh utility that was broken up by a couple of the American utilities.
The United Kingdom has shown a way in pursuing infrastructure projects despite ballooning budget deficits. The concept has been received and applied well in both South Korea and Japan, where the private sector partnership has been increasing in volume and numbers. After a few years of implementation, some policy changes are now being introduced in South Korea while national projects are keeping Japan busy. By Minerva Lau.
The facilities management (FM) sector has never had it so good. The government's continued outsourcing programme has seen many traditional public sectors opening up for the first time creating new and uncharted territory. This new era of partnership and co-operation tests some of the traditional and deeply held perceptions across the private-public sector divide. No better example of this emerging relationship is the current programme of PFI and PPP projects within the UK's healthcare sector. This article by Russell Dallas and Simon Harris of Mott MacDonald's Procurement Advisory Team explores some of the growing pains facing the facilities management industry particularly focusing on the balance between expectation and affordability.
And onto 2004, without a pause for thought for 2003. Will we remember 03? Probably not, in the long pantheon of historical project finance endeavour, it was a mere year, a time to dust down from the woes we loosely called Enron-linked and start again. But 2003 did happen, it is a reality. Jonny Wilkinson has again given us his celebrity thoughts while we can present our own awards courtesy of Comely Gogodancer Ebullient Power.