As much as feasible, we like to intervene as early as possible in the project cycle, because contractual and regulatory arrangements negotiated at this stage are often key in ensuring tht the project is bankable. As lead financial advisor and/or arranger, we usually start with a complete, independent evaluation of the project from an economic and financial standpoint. This usually involves:

• A review of the existing or proposed legal and regulatory arrangements under which the project would operate.
• A review of the demand studies and the methodology used to develop them, as well as an assessment of their level of credibility.
• An extensive review of the project cash flow projections, and of the assumptions made by the sponsor to arrive at such projections.
• State-of-the-art financial modeling, with, when applicable, stochastic forecast of the demand and/or supply side (e.g. when the output good is subject to complete market pricing, such as in a merchant plant).
• Assisting the sponsor in the drafting and negotiation of the project's contractual framework, such as the Power Purchase Agreement, the Fuel Supply Agreement ad the various security packages.

We then examine, with our client,the alternative financing options available. This often means strengthening (or in some cases building from scratch) the equity base of the project, whether through financial investors, or through active investor-operators, specializing in the project's sector. Or tapping the local capital markets, through asset and cash flow-secured bond issues, with the possibility to enhance such issues through bond insurance (depending on the associated country risk).

Other options pursued with the client are:

• Dealing with Export Credit Agencies when goods and services eligible for such financing are expected to be procured forthe project, which often results in low rate, long maturity financing being made available.
• Exploring financing with Multilateral Agencies such as the International Finance Corporation, the Inter-American Development Bank or the Andean Development Corporation, which may allow commercial banks to come into the operation through A/B syndicated loans.
• Setting up a complex asset-based financing structure built around conventional operation, or financial lease schemes, or perhaps building a more comprehensive cross-border lease arrangement.
• Enhancing the project's risk profile, notably by mitigating or removing the country risk, and tapping the international capital markets.

When exploring the various options and structures available for the deal, we also look at the potential sources of funding, and conduct an informal market read of various potential target markets such as the syndicated loan market, the A/B loan market, the public offering (US and Europe) market, and the private placement market. This allows us to understand what sructures may be acceptable in these markets, and to estimate the terms and conditions that will prevail.

The final product of this initial stage is thepreparation of the corresponding term sheet, as well as the invitation to bid (preliminary information memorandum) for the lead arranger mandate.

Depending on the target markets and the instruments selected, we may then act as arranger ourselves. Alternatively, when the country risk is acceptable to Dexia and/or the project can be enhanced to a level consistent with Dexia's risk management policies, we may submit the project for financing and syndication by Dexia or enhancement by a Dexia group entity.

Where we do not play a direct role in placement, we stand with our clients to advise them - starting at the documentation stage, all the way to actual financial closing.