The many activities of PFOs require a multitude of high level skills and qualifications to reside in these groups. However, not all competencies are present in every PFO and that is another reason project advisors and consultants are engaged to supplement the existing capabilities of PFOs. There are three major categories of skills and competencies: general management skills, analytical competencies, and knowledge of financing institutions, techniques, and instruments.
5.3.1 General Management Skills
The general management skills expected of PFO associates in order to be able to function in high visibility, intense activities include:
1. Knowledge of company operations and functioning of the industry globally and especially in the host country
2. Thorough understanding of corporate strategy, and business development and portfolio management objectives
3. Astuteness in identifying the true senior management interests and objectives, risk
tolerance, and support for the project and the PFO
4. Strong internal functional links and personal relationships with CFO, strategic
planning, and business development associates and ability to integrate their objectives in the project development stage
5. Ability to work with the sponsor's decision makers to structure and develop projects and usher them to completion
6. Thorough understanding of the procurement management processes, requirements, and politics; and preparation of responses to requests for proposals
7. Adeptness in preparation of reports and senior management presentations with supporting documentation, data, and charts
8. Good appreciation of and ability to work with participants from different cultures and ways of doing business, and the capability to partner and collaborate with host agency personnel who lack project finance experience
9. Adeptness and appreciation of the project's physical and cybersecurity threats and issues to bring to discussions and address their resolution
10. Experience in determining project participant motives, needs, interests, and objectives, as well as personal gains and costs and benefits
11. Good understanding of Foreign Corruption Practices Act rules and the implications of their violation
12. Strong skills in large project management processes, tools and techniques, and project team partnering and joint planning
13. Experience in integrating and managing project initiation, planning, implementing, and controlling and expertise in defining and assigning roles and responsibilities to the project team and other participants through the project manager
14. Effectiveness in ensuring the 4Cs within the project team and among other project participants, and an ability to implement projects successfully
15. Competency in developing the project company's business plan and influencing decisions around its operations planning
16. Skilled in knowledge gathering, evaluating, and disseminating and managing information in and out of the organization
17. Ability to manage project processes, human resources assigned to it, and advisors and consultants engaged in the project and help the project manager with quality, time, and cost management issues
18. Capability in developing early warning systems, monitoring project performance, and understanding and explaining variances convincingly
19. Capability in relationship building and management along with persistence and
experience to see the project to completion through a long and complex process 20. Ability to work in complex matrix organizational structures involving company and
external organizations
21. Proficiency in educating host government agency personnel in the more significant aspects of project finance
22. Experience in leading or supporting teams to effective project financing and project marketing capabilities
5.3.2 Analytical Competencies
The analytical skills and competencies required of the PFO are an essential part for
effective functioning and the other being experience in financing structuring and closing.
The analytical skills and competencies cover a wide territory and require PFO associates to be:
1. Adept in situational analysis, industry structural analysis, and evaluations of project financeability and economic viability, especially in the presence of regulatory regime changes or changes in agreements
2. Critical thinking, but positive and objective in analyses and evaluations beyond any doubt
3. Thoroughly understanding of the project background, rationale, strategy, merits, and objectives as well as constraints present
4. Probing to determine key project influencing factors and perform reasonableness checks on an ongoing basis
5. Persistent in validating and verifying data, information, assumptions, and scenarios to ensure they pass sanity checks
6. Exceptionally perceptive in the evaluation of company strengths and weaknesses and external environmental factors influencing the project
7. Knowledgeable and experienced in assessing impacts of megatrends and sub trends on the industry and the project itself
8. Astute in understanding basic concepts and premises of competitive analysis, market research, and forecasting techniques
9. Clever in developing, gathering, validating, and testing assumptions that drive cost and revenue projections and the project financial model
10. Adept in modeling project economics and assessing economic viability and able to evaluate critically, independently, and objectively project economics and develop effective reports
11. Experienced in commercial issues, familiar with project finance contracts, and able to dissect and evaluate every aspect of a deal
12. Skilled in supporting contract negotiations and evaluation of proposed terms and counterproposals
13. Competent in leading a team of professional associates in concurrent projects when the need arises
14. Proficient in project risk identification, evaluation, mitigation; and insurance contracts and programs, costs, and terms and conditions
15. Thorough in evaluation of project development areas, objective in review of the due diligence report, and in critical assessment of financial model findings
16. Adept in developing project feasibility studies, business cases, and project company business plans and targets
17. Show penetrating thinking in the development of a baseline and alternative scenarios and the selection of the cost and revenue projections in simulation ranges
18. Proficiency in assessing all infrastructure project opportunities in its industry, including privatizations of public sector assets
5.3.3 Knowledge of Institutions, Techniques, and Instruments
Exceptional skills and competencies, knowledge, and networks and strong relationships with financial institutions, multilateral agencies, development banks, export credit agencies, and other financial intermediaries are a must. A deep understanding of
customer financing needs as well as experience with project finance processes and rules, and ability to pick the right instruments must be part of the qualifications PFO associates bring to the table. The list of common PFO skills and competencies in this area includes:
1. Expert assessment of the host government ceding agency capabilities in project finance and its ability to deliver on future contributions and obligations
2. Recognized expertise, reputation, and acceptance internally and outside the company and proficiency in project finance practices and processes
3. Skilled in creating the project financing plan, developing and modeling project financials, testing and evaluating financial model inputs and outputs, and defining drawing and repayment parameters
4. Probing to understand global debt and equity market conditions and prevailing terms and conditions
5. Deep knowledge of the domestic, host country, and global financial markets; sources of short and long term financing, and relationships and access to decision makers
6. In depth understanding of multilateral and unilateral agencies' functioning, programs, requirements, and approval processes
7. Knowledge of donor institutions' programs, requirements, criteria, and approval processes
8. Extensive networks and relationships with debt and equity sources around the world and knowledge of their processes and their way of doing business, documentation requirements, and thorough understanding of term sheet terms and conditions
9. Expert in sound financial engineering processes and instruments and competency in project and financing structuring and implementation mechanics
10. Good understanding of the structure and content of project agreements and contracts and an ability to work closely with the legal team to develop the contractual
framework and translate its structure into financial model inputs
11. Expertise in project finance principles, processes, prerequisites, guidelines, and channels and facilities available and experienced with the workings of credit enhancements and project support and their applications
12. Understanding of the implications of different structures and options for the SPC 13. Understanding of differences with the host country's models concerning bidding
terms, concession grants, and financing
14. Structuring bids so they display transparency of the financing plan and influencing the negotiations framework and positions to ensure balance of participant interests and project sustainability
15. Skillful in addressing sponsor and host government agency project support and security issues
16. Expertise in managing project processes and coordinating other project participant contributions and deliverables in different stages and evaluating of financing structure implications
17. Competency in financial model building and analysis and understanding of how to influence key drivers to optimize the project financing structure
18. Knowing well the roles and responsibilities of financiers and getting their insights for successful financing
19. Experienced in developing and using project financing models, knowing the rules of negotiating project financing deals, and incorporating properly negotiated terms in project models
20. Ability to alter the project financing structure when condition warrant it and make changes to the project company business plan to achieve the desired state