Project Finance (ECFS877)

Project Finance typically involves an independent legal entity operating as a vehicle for owning and funding large scale projects. Capital sources for the entity will be a combination of equity from sponsors and debt from the bank or capital markets. The application of this financing approach is most commonly seen in the fields of infrastructure (both social and economic) and natural resource financing. Examples include the financing of toll roads, power stations, mines, pipelines, telecommunications networks, hospitals and public buildings such as courts and prisons. This course considers the financial techniques applied to solving such funding requirements in both the domestic and international context, and the business rationale for project finance. A comprehensive risk system is introduced for the identification and systematic allocation of risk in the various approaches to structuring a project financing. Funding, political-risk structuring, and recent capital-market developments are highlighted in class and through practical case studies. A heavy emphasis is placed on the international character of the project finance industry. The skills gained in this course will be relevant for corporate executives, bankers, lawyers, consultants and government officials who may be involved in large scale infrastructure and resource developments.

Learning Outcomes:

  1. Development of a thorough grounding in the characteristics that make a large scale investment a candidate for Project Finance.
  2. Development of skills to (i) evaluate risks in large scale investments and (ii) to structure transactions in mitigation of those risks.
  3. An ability to make an analytical assessment (including valuations and cash flow modelling) of a proposed investment from the perspective different stakeholders, including lenders, sponsors and investors and other involved parties such as governments.
  4. Exposure to notable contemporary transactions that inform developments in the policy and practice of project and infrastructure funding.
  5. An understanding of sources of finance and the requirements to obtain funding from different providers.

Topics:

  1. Introduction to Project Finance and Large Scale Investments
  2. Structure and Risk
  3. Valuing Projects
  4. Managing Risky Projects
  5. Financing Projects
  6. Sources of Funds
  7. Transaction Lifelines and Tools

Prerequisite Units:

Lecturers:

Unit Guides:

  • Project Finance - The link will provide a list of guides for this unit. If the desired term/location is not listed, please view the latest one available.

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