Chad Cameroon Pipe

Line Case
Project Finance
Giada
Himanshu
Srinivas
Rutvik

Financing Options
Corporate Finance

Project Finance

Risk concentration on one

company

Non-recourse loans restrict the

losses on the subsidiary

Added Risk of negative cash

flows affecting parent
company
500
700
900
1100
1300
#NUM!
Lower Debt
coverage
ratios
11
#NUM!
#NUM!
1.4%
might
affect
credit-3.6%ratings
of 5.4%
#NUM!
-6.0%
0.6%
5.4%
9.5%
the13 company
15

#NUM!

Allow the parent company

access to cheaper debt (since
it has
higher
coverage
ratios
) 1300
-5.24%
500
700
900
1100
11

-16.5%

0.4%

9.8%

17.1%

23.2%

13

-6.7%

6.7%

15.8%

23.2%

29.4%

-2.0%

4.1%

8.9%

13.2%

15

-0.6%

11.9%

21.0%

28.5%

35.5%

17

-8.4%

1.0%

7.1%

12.1%

16.5%

17

4.1%

16.4%

25.7%

33.6%

41.6%

19

-4.7%

3.7%

9.8%

15.0%

19.6%

19

8.3%

20.5%

29.9%

38.9%

47.3%

Field and Export System Owners

Field System

Restricted to one location and more technological

demanding, lesser number of stakeholders
Lower transaction costs and time delays need for critical well
control projects
Projects exploration and development($5.20) cost lower
than the most conservation oil price estimates ( $14 $20 )

Exports Systems

Multiple stake holders, larger risks, diversification needed

Project Finance with World Bank gives access to funds under

the IBRD and EIB

Government stake makes project relatively immune to

adverse government actions
External Monitoring by WB enables social development

World Bank ( Shrinis Part )

Appendix I Financing Options for

Exxon
EM as the single sponsor $3723
million (considering a private
financing structure, and with AAA
rating to Exxon, can take up debt to
support the project)
EM with 3 corporate sponsor $1489.2 mill (40% of 3723 ) (With
at AA- , the consortium can raise
debt, upto any level it requires for the
project) [using a numerical scale
mode, one can arrive at a synthetic
rating of AA-)
Current Financing Structure (CF and
PF)
$883 million as the equity
100% PF with D/V 60% - $595.68
million (considering Exxons Share as
40%)