MDF - Project Finance

Project finance is a specialized tool for financing a development on a stand-alone basis with the financier relying on future cash flows as the primary source of repayment. The projects assets, rights and interests are held as legal collateral. The ‘core’ of the business is a full understanding of the project and institutional risks. Only then can the structuring and appropriate funding be understood.

First, the theoretical and academic foundations to the financial, national, and institutional considerations for project finance will be canvassed. The learning log for this course focuses the student on developing a hands-on, practical, systematic, and applied approach to project preparation, analysis, and finance at every level.

The course methodology is a mix of lectures/course material, in-course worked examples, case studies and a workshop on financial risk and structure. Handbooks, guidelines, articles, journal materials and matrix/checklists will serve as reference material for future project design and delivery.

Besides pre-course reading and presentation, the course format includes pre-assigned questions and topics for discussion. A highly interactive environment thus extracts the course features for each student.

Mark: Your grade will be weighted as follows: Classroom/Coursework (10%), Essay (20%), Dealsheet (5%), Case Study (25%), Final exam (40%).

The course notes will contain the necessary background and reading. However, these additional sources will enhance the overall coverage of this core module:

ADB (2002), Guidelines for the Financial Governance and Management of Investment Projects Financed by the Asian Development Bank.

ABD (2002), Handbook for Integrating Risk Analysis in the Economic Analysis of Projects, May.

Benoit P. (1996), Project Finance at the World Bank: An Overview of Policies and Instruments, World Bank Technical Papers – No. 312.

Cordukes P.A. (1994), Submission and Evaluation of Proposals for Private Power Generation Projects in Developing Countries, World Bank, Discussion Paper 250.

IFC (1999), Results on the Ground 4: The Private Sector and Development: Five Case Studies.

Morisset J. (2000), Foreign Direct Investment in Africa : Policies Also Matter, World Bank Working Papers No. 2481, November.

Razavi H. (1996), Financing Energy Projects in Emergency Economics, Pennwell Books.

Tinsley C.R. (2000), Advanced Project Financing: Structuring Risk, 1^st Ed., Euromoney Books.

Note: Case profiles and emphases will necessarily change over time to highlight developing trends and best practices.

Richard Tinsley is president of International Advisory & Finance (IAF) based in Sydney, Australia. IAF is an international network of advisory and venture capital boutiques. Australia is his fifth country of permanent residence. He is also a director of Asia Pacific Power and a co-founder of Imfosys, a medical software/risk management company. Richard is Visiting Fellow for Macquarie University’s Project Finance course in the Master of Applied Finance throughout Australasia. Besides his 27 years in the finance sector, he was CEO, CFO, and Chairman of various construction, production, and development companies. He serves as a strategic and financial adviser to infrastructure, energy, resources, and power companies and government ministries world wide.

Director: IAF Pty Ltd, Asia Pacific Power Pty Ltd, Imfosys Pty. Ltd.

He has authored three books on Project Finance and a self-instruction ( 3 CD-ROM) set on Project Finance, all for Euromoney Books. Richard is a frequent course presenter on all sectors of Project Finance, including Project Finance Modelling and Public Private Project Finance.

Research Fields: Project Finance, Risk Tradeoff / Credit Risk Metrics, Development Finance, Risk Management.

© IAF 2009 email: iaf(AT)iaf.biz