Grontmij Business Solutions

Transcription

1 Grontmij Business Solutions Engineering Investments Flexibility and uncertainty as opportunities to create value White Paper

2 Engineering investments Grontmij Business Solutions improves the financial feasibility of complex infrastructure projects by bridging the gap between Engineering and Finance. Capabilities Services Results Use technical knowledge of the asset to implement flexibility and phasing and use financial knowledge to value flexibility and phasing (Real Options) Academic expertise and experience in both engineering and finance A good understanding of the project s technical risks in relation to its financial return A good understanding of the information required by investors and provided by technical specialists Business Case development Risk analysis and identification of performance indicators (KPI s) Financial modeling and valuation Adaptive development strategy; Optimize project performance and risk management with ability to adapt to changing circumstances Decision planning and investment rationale; when invest what and why Risk & Value management Monitoring of cash flow and risk to ensure maximum project value at minimum risk during investment and operational phase Technical Due Diligence & Lender s Technical Advisory to protect the interests of investors and financiers A Increased project performance and reduced costs (25-35% savings) B C D Optimized risk management by relating engineering risk with financial risk Improved investment planning with an adaptive development strategy Total Cost of Ownership over the life cycle of the project 2

3 Optimalisation of performance, risk and cost Analysis Implementation Monitoring Analysis of Master Planning and Strategic Goals Analysis of the strategic project potential with project goals and expected market developments Business Case Analysis Identification of the critical project drivers, performance indicators (KPI s) and financial parameters Identification of the subprojects and their interdependencies Conclusion on the milestones and phasing of the subprojects Cash flow analysis Risk Analysis Risk identification, risk assessment and risk mitigation Business Case Optimalisation Use of an adaptive project development strategy with use of flexibility and active optimalisation of performance, risks and costs Financial modeling Project and asset valuation (e.g. with use of Real Options methodology) Decision planning and long-term investment planning; when to invest in what and why Value Engineering Design and value optimalisation Synergy and cost reduction with a multidisciplinary team of experts Risk & Value Management Monitoring of cash flows and risk Adaptations, interventions and action planning Risk Control, Technical Due Diligence and Lenders Technical Advisory Risk Analysis and Risk Management on behalf of the interests of the financiers, investors and/or insurer 3

4 Case examples Characteristics of projects Uncertain elements Bias on parameters by uncertainty on technology, operations, environment or (foreign) markets Complexity Non-repetitive projects with many stakeholders and multiple design alternatives, multiple sources of uncertainty and changing risk levels Long term Infrastructural investments with large upfront CAPEX and significant payback period Examples Mainly project finance and public private partnerships (PPP s). Direct investments. Infrastructure projects (energy, utilities, water, transport, resources and social infrastructure projects) Portfolio analysis & development Projects with significant year payback period (>10y) and large initial CAPEX (>100Mn) 4

5 CV Cederik Engel Information Expertise and Education MSc Civil Engineering at the Delft University of Technology MSc International Finance at the Amsterdam Business School University of Amsterdam. Thesis: a financial model for the valuation of complex projects under uncertainty. Grade A. Cederik is a commercial engineer with consultancy and risk management experience in business insurance and commercial banking. He is currently applying his skills in (renewable) energy or infrastructure finance with a focus on project finance and financial modelling, asset management and risk management. Experience Cederik s current activities are: Business Development regarding financial modeling and business valuation using real options methodology. Other activities: Life Cycle Analysis / Total Cost of Ownership / Value Engineering; ir. drs. Cederik L.H. Engel Cederik.Engel@ grontmij.nl Cederik s main experience is in the field of: Performing on-site technical and operational risk assessments (200 in total) for a leading property insurance company, including recommendations for risk mitigation with broad limits of authority. Providing advanced risk management and safety consultative services to customers in identifying exposures with significant loss potential, investigation of cause/effect of major losses and hazard/safety management programs. 5

6 CV Coos van Buuren Information Expertise and Education MSc in quantitative finance (Erasmus University Rotterdam) MSc in hydraulic engineering (Delft University of Technology) Coos has a profound understanding of the interrelation between civil engineering and financial modeling with a history in investment banking (mergers and acquisitions) and business development at a major private container terminal investor. Coos scope of work covers transaction services of public tenders, business valuation and probabilistic design. Experience Coos current topics are: Asset management consulting Business valuation of investments under uncertainty and financial modeling of flexibility Life cycle analysis total cost of ownership and life cycle costing Value engineering Drs. Ir. Coos van Buuren Coos.vanbuuren@ grontmij.nl He currently works on: Managing the transaction of a large maintenance contract (100Mn contract value) A pilot study at Port of Rotterdam on financial modeling and business valuation using real options methodology Assessing the Belgium coast and defining new safety standards 6

7 The information in this presentation reflects prevailing views and current market conditions, all of which are accordingly subject to change. In preparing this presentation, Grontmij has inter alia made use of publicly available information and information from other sources without independent verification of its accuracy and completeness. This presentation is confidential and may not be disclosed to third parties or entirely by the recipient without prior written consent of Grontmij. 7