NPTEL Syllabus

Financing Infrastructure Projects - Web course

COURSE OUTLINE
The course is designed to introduce the unique characteristics of financing infrastructure
projects to students of civil engineering who are going to play a major role in development
and management of infrastructure projects. Furthermore, critical issues in infrastructure
financing such as government role in infrastructure creation, regulation, frameworks for
private sector participation, public private partnerships, and risk management are dealt in
detail. The course includes few case studies to demonstrate the application of the
theoretical concepts on infrastructure financing such as procurement process, risk
management and project finance.
Contents
Introduction to infrastructure financing; Role of governments in financing infrastructure
projects; Economic multiplier effects of infrastructure; Means of financing-public finance and
private finance; Procurement of infrastructure projects through Public Private Partnership
route-Types of PPP models, Contractual structure of PPP projects, Value for money
evaluation, Lifecycle of PPP projects, PPP procurement process; Concessions for
infrastructure-Design and award, Allocation of responsibilities, Price setting, Penalties and
bonuses, Dispute resolution; Financing infrastructure projects with private capitalIntroduction to project finance concept, Analyzing project viability, Designing security
arrangements, Structuring the project, Preparing project financing plan; Risk management
of infrastructure projects-Risk associated with various infrastructure projects, Risk
identification techniques, Risk allocation frameworks, Risk mitigation strategies; Ratings of
infrastructure projects-Role of credit ratings in financial infrastructure projects, Rating
frameworks used by national and international credit agencies; Case studies.

NPTEL
http://nptel.iitm.ac.in

Civil
Engineering
Additional Reading:
Guidelines issued by
government agencies,
financial institutions,
multilateral institutions
and technical papers on
procurement of
infrastructure projects
across various sectors.
Coordinators:

Module
No

Module Topic

No. of
Hours

Infrastructure Development - Introduction

Public Private Partnerships Procurement Process

Concession Design and Award

Risk Management of Infrastructure Projects

Project Finance

Credit Rating of Infrastructure Projects

Total

40

Dr. Laishram Boeing

Singh
Department of Civil
EngineeringIIT Guwahati

Sl.
No.

Topic

Lecture
Hour

Module I

Definition of infrastructure; Multiplier effects of infrastructure

development on economic development of the nation

Sources of financing infrastructure projects: Traditional and private

investments; Various financial instruments

Limitations of traditional procurement system of infrastructure; Legal

frameworks and Incentives for private sector participation in
infrastructure development

Module II

Introduction to infrastructure development through PPP route;

Benefits of PPP mode of procurement; Types of PPP Models and
their contractual structure

Stakeholders perspectives: Granting authority, Funders and

Concessionaire

Governments role in successful PPP projects

Financial and Economic Appraisal of BOT Projects; VFM evaluation

PPP procurement process; Lifecycle of PPP projects

Contractual package of PPP project; Bankable concession

agreement

10

Case study Procurement process of Indian PPP projects

Module III

11

Introduction to concession design and award

12

Concession Design: Price setting; Price adjustment; Specific

performance targets; Penalties and bonuses; Public parties security
rights; Duration, termination, and compensation; Force majeure and
other unforeseen changes; Dispute settlement

Concession Award: Competitive bidding; Direct negotiations and

unsolicited proposals; Competitive negotiations; Prequalification and

13

14

unsolicited proposals; Competitive negotiations; Prequalification and

shortlisting; Bid structure and evaluation; Bidding rules and
procedures

Case study Model concession agreements of highways projects

in India

Module IV

15

Risks associated with various infrastructure projects; Introduction to

risk management concept

16

Risk analysis techniques

17

Risk mitigation strategies

18

Risk allocation frameworks of major infrastructure projects procured

through various PPP modes

19

Computer-based approach to risk management in infrastructure

finance

20

Case study Risk allocation frameworks of Indian PPP projects

Module V

21

Introduction to project financing concept

22

Analysis of project viability

23

Designing security arrangements

24

Preparing the project financing plan

25

Case study Financial structure and infrastructure project finance :

the Hong Kong Western Harbour Crossing

Module VI

26

Introduction to credit rating of infrastructure projects and role of

credit ratings in financing infrastructure projects

27

Rating frameworks of various national and international credit rating

agencies for infrastructure projects in various sectors.

References:
1. Akintoye, A., Beck, M., & Hardcastle, C. (Eds.). (2003). Public-Private Partnerships Managing risks and opportunities. Oxford: Blackwell Science Limited.
2. Finnerty, J. D. (1996). Project financing - Asset-based financial engineering. New
York: John Wiley & Sons, Inc.
3. Merna, T., & Njiru, C. (2002). Financing infrastructure projects (First ed.). London:
Thomas Telford.
4. Nevitt, P. K., & Fabozzi, F. J. (2000). Project financing (7 ed.). London, UK: Euromoney
Books.
5. Raghuram, G., Jain, R., Sinha, S., Pangotra, P., & Morris, S. (2000). Infrastructure
Development and Financing: Towards a Public-Private Partnership: MacMillan.
6. Tinsley, R. (2002). Project Finance in Asia Pacific: Practical Case Studies. London, UK:
Euromoney Books.
7. UNIDO. (1996). Guidelines for infrastructure development through Build-OperateTransfer (BOT) projects. Vienna: UNIDO.
8. Walker, C., & Smith, A. J. (1995). Privatized infrastructure: the Build Operate Transfer
approach. London: Thomas Telford.
9. Yescombe, E. R. (2002). Principles of Project Finance. California: Academic Press.
10. Kurowski, L., & Sussman, D. (2011). Investment project design - A guide to financial
and economic analysis with constraints. New Jersey: John Wiley & Sons.
11. Pretorius, F., Lejot, P., McInnis, A., Arner, D., & Hsu, B. F.-C. (2008). Project finance for
construction and infrastructure: Principles and case studies. Oxford: Blackwell
Publishing.
12. Weber, B., & Alfen, H. W. (2010). Infrastructure as an asset class - Investment
strategies, project finance and PPP. West Sussex: John Wiley & Sons
A joint venture by IISc and IITs, funded by MHRD, Govt of India

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