LECTURE 1

Scale and scope of modern project finance industry.  Criteria applicable to all stakeholders.  The project-finance ‘option.’  Industry sectors favoured and methods to enhance more difficult sectors.

1.       APF, Ch. 7, “Sector Profiles.”

2.       World Bank (2002), Global Development Finance : Financing the Poorest Countries, Ch.2 “Private Capital Flows to Emerging Markets.”

3.       Project Finance International, League Table issues.

LECTURE 2

Risk identification, quantification, and analysis.  The nature and definition(s) of risk.  The acknowledged financial structures will be established.  Government, financial-institution, cross-border, and bilateral/multilateral policies and procedures.  (Political risk is covered in Lecture 8.)  The ‘non-recourse’ vs ‘limited-recourse’ debate. 

Case A:                  Noida - Toll Bridge

4.       APF, Ch. 6, “Risk Systems.”

5.       ADB (2002), Handbook for Integrating Risk Analysis in the Economic Analysis of Projects, Ch.2, “Technical Approaches to the Analysis of Risk in Project Economics” and Appendices.

6.       Harsh B. (2000), “Guaranteeing Revenue for Infrastructure Projects,” World Bank Institute:  Building Knowledge and Expertise in Infrastructure Finance.

LECTURE 3

Project preparation and presentation.  Due diligence techniques.  The role of advisers and consultants.  Determination of the key cashflow measures as well as ERR.  The use and abuse of IRR.  Cost-benefit analysis.  Project selection and ranking.

Case B:                  Victoria Falls Safari Lodge

7.       APF, Ch. 9, “Due Diligence.”

8.       APF, Ch. 5, “Credit Ratios.”

9.       Lysy F.J. (1999), “Assessing Development Impact”, IFC, October 20.

LECTURE 4

Private sector organisation of project finance including special purpose vehicles.  Implementation of successful public private project financing (PPPF).

Case C:                 Inkosi Albert Luthuli Central Hospital

10.   IFC (1994), Financing Private Infrastructure Projects: Emerging Trends from IFC’s Experience, Discussion Paper 23.

LECTURE 5

Public-sector requirements for privatization concessions, and PPPF, including subsequent sector re-regulation.  International best-practice, trends, and influences.  Country financial structures suited to project finance.  Institutional strengthening and training.

Case D:            Tianjin – Wastewater Treatment

11.   Ogunbiyi C., Norris S. (2002), Public Private Partnerships Embracing Innovation Business in Africa, July/August, pp 72-74

12.   World Bank (2002), Global Development Finance: Financing the Poorest Countries, Ch. 3, “The Poor Countries’ International Financial Transactions”.

13.   Estache A., Romero M., Strong J. (2000), “The Long and Winding Path to Private Financing and Regulation of Toll Roads,” World Bank Institute, WPS 2387.

14.   Chege L. (2001), “Recent Trends in Private Financing of Public Infrastructure Projects in South Africa,” Akani, July.

15.   South African Treasury (2001), Public Private Partnerships: A Manual for South Africa’s National and Provincial Government Departments and Schedule 3 Public Entities, Ch. E, “Project Finance”.

LECTURE 6

All forms of project funding sources will be examined including debt, equity, specialist funds, bilateral, multilateral, environmental, aid, and concessional funding.  Local and community-based finance.  Credit enhancements, guarantees, securitisations, and specialised insurances.  Capital markets and project-finance ratings.  The special structures for Islamic project finance.

16.   APF, Ch. 2, “Funding Sources.”

17.   Tarp F. (Ed.) (2000), Foreign Aid and Development : Lessons Learnt and Directions for the Future, Routledge, Ch. 13, “Foreign Aid and Private Sector Development.”

LECTURE 7

Legal and documentation issues from constitution and concession to corporate organisation.  Institutional aspects of project finance structuring and implementation.  Risks vs Documents matrix.  Why projects go wrong.

Case E:                                    African Municipal Project

18.   APF, Ch. 25, “Legal Risk.”

LECTURE 8

The 22 political risks that need structuring.  The 14 primary structures including political-risk insurance, export-credit, cofinancing, guarantees,  and development agencies such as Development Bank of Southern Africa.  The fit of sovereign/country analysis to project finance structuring.

19.   APF, Ch. 21, “Political Risk.”

20.   Wagner D (1999), Political Risk Insurance Guide, International Risk Management Institute, Ch.4, “Private vs Public Sector Underwriters.”

21.   Standard & Poors (2001), “B Loans and Political Risk Insurance: Different Roads to the Same Direction.”

LECTURE 9

Workshop: Individual pre-assigned role-playing for each student to develop full risk-analysis profile and successfully negotiate the structure and risk allocation matrix for the given course project.

LECTURE 10

The outlook for project finance as a tool for development finance.  New structures and policies that can be considered.  Sustainability of projects and their financing.

22.   APF, Ch. 8, “Structures.”

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