| 摘要 | ABSTRACT
1. Research Purpose
Although Korea��s investment in overseas E&P projects has increased, we mostly have focused on public corporations through minor equity participation in merger and acquisition (M&A) at the production stage. That is because the government support in energy resource development has not been strong enough and the investors have been inexperienced in overseas large-scale and high-risk projects. The government has supported the public enterprises via the traditional corporate financing, which exacerbates the company��s financial structure and credit rating.
The market of natural resource development is becoming more competitive than ever as energy demand and supply fluctuates wildly in price. In other words, when uncertainty in the market of natural resources becomes severe, we are witnessing related difficulties more obviously. Though Korean E&P companies have attempted to raise available funds to start E&P projects in new emerging resource- abundant areas including African countries, it is challenging due to the high political risk or non-commercial setting that investors frequently confront in the areas.
In regards to the above issues, project finance has advantages including off-balance sheet financing and non-recourse structure. Thus, major E&P companies raised funds for large-size and high-risk E&P project via project finance. This study focuses on attempting to use project financing technique in overseas large-scale and high-risk E&P projects.
2. Summary
Project finance is a long term financing for infrastructure and industrial projects based upon the projected cash flows of the project rather than the balance sheets of the project sponsors. Usually, a project financing structure involves a number of equity investors, known as sponsors, as well as a syndicate of banks or other lending institutions that provide loans for the operation. The loans are the most commonly non-recourse loans, which are secured by the project assets and paid entirely from project cash flow, rather than from the general assets or creditworthiness of the project sponsors.
Because the project finance is not based on the sponsor��s asset or collateral, it is very complicate to raise fund from financial intermediaries and private investors. It is based on the creation of a project company (also known as a special purpose vehicle (SPV) for the design, construction, and management of a single project. To mitigate risk across project parties, financial transactions are supported by the existence of a network of non-financial contracts.
This paper consists of several chapters. Chapter 2 and 3 introduce basic concepts and the principles of project financing technique and analyze its pros and cons with comparing to other techniques in E&P projects.
Chapter 4 provides our empirical study on the determinants on loan pricing and the capital structure of E&P project finance transaction. By using more than 1500 project finance deals (1999 to 2012), we estimate the influence of non-financial contracts, microeconomic loan variables, transaction location, and sector on both deb-to-leverage ratio and the loan spread. We find main results: 1) The relation between O&M contracts (sponsor involvement) and the loan spread are not statistically significant; 2) The coefficient of the EPC contract is positive on the loan spread when the EPC contract is not in place; 3) The coefficient of the off-take contract is negative on the debt-equity ratio and positive on the loan spread when the off-take contract is not in place. To sum up, contrary to our initial expectation that operating-sponsor has strong influence on the loan pricing, it��s not true in the statistical sense. Rather, the EPC contract related to Export Credt Agencies (KEXIM and KSURE) has impact on the loan pricing. Besides, we find that participation of KOGAS or KORES as an offtake-sponsor is strongly effective in raising external funds.
Chapter 5 discusses the reality in both E&P project decisions and our actual financial environment. We find these main reasons why the companies are not willing to use project financing technique in E&P projects: 1) the management group and the executive group cannot narrow their difference in opinion because of lacks of expertise; 2) the government and Export Credit Agencies have not strong support to the project because of lacks of funds and cooperation between public institutions; 3) private financial investors cannot raise funds to high-risk and large-scale projects in weak financial environment.
3.
Research Results and Policy Suggestions
First, we study capital structure and cost of debt financing between sponsors and lenders. Contrary to our initial expectation that operating-sponsor has strong influence on the loan pricing, it��s not true in the statistical sense. Rather the EPC contract related to Export Credt Agencies (KEXIM and KSURE) has impacts on the loan pricing. Besides we find that participation of KOGAS or KORES by an offtake-sponsor is strongly effective in raising external funds. Second, we reflect the reality in E&P project environments and make policy suggestions to activate project finance more practically. 1) Training experts in both the management group and the executive group of private enterprises. 2)Fostering resource development service and supporting technology assessment costs. Enhancement of the role of Export Credit Agencies (ECA) by raising funds and training of professional staffs. 3) Supplementation of current financial support schemes and the introduction of new financial instruments including private equity funds and mutual funds. 4) Extension international cooperation between governments and international financial institutions. |
