Robin Baker

Visiting Research Fellow

Robin Baker has over 35 years’ experience in energy finance; with the Chase Manhattan Bank where he headed the Oil & Gas Group’s Asia Pacific region and subsequently with Société Générale, heading their Global Energy Finance Group. He is currently a Managing Consultant with Gas Strategies. He has been particularly active in advising and lending project finance to the energy sector and has provided financial advice to many projects throughout the energy chain; from upstream oil and gas to power generation. He has been actively involved in LNG since leading the first international LNG project finance (for Woodside’s share of the first Northwest Shelf LNG project) in 1987 and has advised LNG projects in Qatar, Egypt, Indonesia, Russia, Australia, PNG, the USA and Mozambique.  Prior to energy finance he worked in various refining and supply planning positions in the UK and Asia with the Royal Dutch/Shell Group. He has a B.Sc. in Chemical Engineering from Imperial College and an MBA from Cranfield School of Management, and is a Fellow of the Energy Institute.

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                    [post_content] => The global climate change imperative presents a particular challenge because of the scale and nature of the investment needed in developing countries, coupled with the difficulty of raising long term debt in many of them. Project finance can help to address this challenge because it enables separation and allocation of different risks to different parties, which can help to attract different funders with different risk appetites. In particular, it is a vehicle to segregate green assets for funding and could assist in incorporating targeted credit enhancement products, such as those offered by the World Bank and other governmental agencies looking to promote clean energy investments. This international dimension is critical, as the challenge will require substantial outside support and innovation. The constraint is not the global availability of finance, but the risk profile of the projects (mostly local-currency generating projects with longer-term infrastructure-type returns) and the availability of the necessary skilled resources. Unless addressed, these constraints will continue to limit the availability of debt finance for clean energy projects in developing countries and thus the ability to achieve global climate change objectives.
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                    [post_content] => Since the 1980s the growth of the LNG business has been underpinned by third party finance, predominantly from international banks, under limited recourse project finance. Financings were also often backed by political risk cover from Export Credit Agencies. Under these arrangements the project itself borrowed money to fund its development enabling financially weaker shareholders to participate in the project. Key to the funding was the existence of reliable revenues from the project secured though long-term offtake contracts with creditworthy buyers. The LNG business is changing as it transitions from its historical structure to a more merchant structure where buyers seek greater flexibility of volumes and price, often linked to hub prices, and in many cases shorter-term contracts. With an expected 70-100 mtpa new LNG FIDs over the coming years, the question is, are lenders willing to loan funds based on these more flexible terms?

Robin Baker has authored this, his first paper, with the OIES, based on over 35 years experience in the banking sector at Chase Manhattan and Société Générale. He examines, from a finance perspective, the approach of the various lending markets to the sector and the challenges faced in raising debt finance for major future LNG projects.
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Latest Publications by Robin Baker