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Course Details

Program Name EPGP Batch 15

Term 5 Year 2023-24, 2nd Year

Course Code & Course Title Project Finance

Course type Elective Course Credit 2

Total no. of sessions 8 Session Duration 150 min

Sections (if any) Consultation Hours ---

Contact Details 8943716269; [email protected]

Office 0495-2809121; Room no 21; Block 01

Pre-requisites (if any)

Instructors

Faculty Name

Pankaj Kumar Baag

Introduction
Project finance refers to financing arrangements where the terms and conditions of the debt
are directly related to the specific purpose for which the proceeds will be used. In such deals,
lenders often have to rely only on the cash flows from those projects with limited or no
recourse to the broader balance sheet of the sponsoring corporation. Resultantly, such an
arrangement is often referred to as “structured finance” since the repayment schedule and
covenant packages for this debt are likely to reflect specific project cash flows or other
characteristics of the assets being financed. Project financing is used by asset intensive
industries as a way of mitigating risk. It is a popular method of financing cross-border
projects, particularly in developing countries. For some assets, project financing is driven by
the ability to capture tax advantages that are tied to specific assets or to particular issuers of
debt (such as municipalities). Capital for project financing is provided through bank lending,

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public debt offerings, lease financing, and a wide range of governmental and
quasigovernmental agencies.

The course should broadly cover issues related to (i) choice between corporate and project
finance, sources of project finance, valuing projects, managing project risk and structuring of
the financing deal- Revenue requirements, Capital structure, debt syndication, securitization,
(ii) Political, legal and market related issues pertaining to disclosures, supports and
guarantees in infrastructure related projects (iii) alternative sources of finance: Conventional
and non conventional (Infrastructure Debt Funds, Take out financing and issues related to
debt restructuring).

Learning Objective / Course Outcome

Degree
Key
CLO Key Linked of
word
Verb from Programme emphasis
CLO linking
CLO Bloom’s Level Description given to
No CLO
Taxonomy Objective the PLO
with
verb list (PLO) No. in the
PLO
course

Critically
evaluate and
integrated
Learn the
business
fundamental
intelligence and
CLO1 concepts in 1.2
apply concepts to
project
practice.
financing
(Integration &
application of
concepts).

Critically
Learn about evaluate and
various integrated
financing business
options intelligence and
CLO2 1.2
available for apply concepts to
managers to practice.
finance (Integration &
projects application of
concepts).

Develop the
tools and
techniques
which help Communicate
students ideas effectively
CLO3 take project 2.3 to influence and
finance inspire
decisions in (Communication)
an uncertain
economic
environment

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Textbooks and Learning Materials (if any)

1. Book: Project Finance: Asset Based Financial Engineering 3ed by Finnerty, J.D.,
Wiley (1JDF)

Additional Readings (if any)

1. Reading: Characteristics of alternative price control frameworks: an overview by

Chris Decker (2CD)
2. Reading: Auction Theory for the new economy- Note by L.M. Ausubel (3LM)
3. Reading: The Anatomy of Construction Risk: Lessons From a Millennium of PPP
Experience-Note by Bain, Robert, and Jan Willem Plantagie. (4BR)
4. Reading: Role of Institutional arrangements in financing project companies in Asia-
Note by Devapriya and Alfen (5DA)
5. Projects- Planning, analysis, selection, financing, implementation and Review By
Prassanna Chandra latest edition McGrawHill (6PPC)

Case

1. Note: An overview of project finance and infrastructure finance- 2014 update --

214083-PDF-ENG
2. The Chad Cameroon Petroleum Development and Pipeline Project (A) --202010-
PDF-ENG (B,C,D,E --addl. to be provided separately)
3. Australia-Japan Cable: Structuring the Project Company -- 203029-PDF-ENG
4. Chase’s Strategy for Syndicating the Hong Kong Disneyland Project Loan (A) --
201072-PDF-ENG (B --addl. to be provided separately)
5. Project finance for Autopistas del Centro -- NA0266-PDF-ENG
6. Airbus A3XX: Developing the World's Largest Commercial Jet (A) -- 201028-PDF-
ENG (B --addl. to be provided separately)
7. Bidding for Antamina -- 297054-PDF-ENG (addl note to be provided separately)
8. Note: Economic Framework for Assessing Development Impact -- 202052-PDF-
ENG
9. Petrolera Zuata, Petrozuata C.A -- 299012-PDF-ENG

Pedagogy/Learning Process

To discuss conceptual aspects through lecture method.

To impart analytical skills through cases, readings and assignments.
To provide an exposure to decision making based group project work

Evaluation Components/Assessment of Student Learning

PLO
Assessment Tested
Weight Remarks Description
Tool (give the
PLO No)

Projects 25% 2.3 Communicate ideas

effectively to influence and

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inspire (Communication)

Communicate ideas
effectively to influence and
inspire (Communication)
Class Critically evaluate and
participation 2.3
25% integrated business
and 1.2
intelligence and apply
assignments concepts to practice.
(Integration & application
of concepts).

Communicate ideas
effectively to influence and
inspire (Communication)
Critically evaluate and
End-term 2.3
50% integrated business
Exam 1.2
intelligence and apply
concepts to practice.
(Integration & application
of concepts).

Session Plan

Session
Module Topic Covered Reading Material
No

Introduction to project finance; Ch 1, 2, 3, 4 (1JDF)

1 Introduction difference from corporate finance;
regulatory pricing Note-Case 1

Ch 7, 8 (JDF) and
Reading (DA5)
Structuring projects, leveraging
2 Structuring projects finance for developments, Structuring-Case 2,
financing projects 3

Financing-Case 4

Ch 5, 9, 10 (JDF)
Analyzing projects viability, Project
3-4 Analysis appraisal, Impact of refinancing on Analyzing viability-
project appraisal
Case 5

5-6 Managing Managing risky projects, Auction Ch 13, 14 (JDF) and

design and strategy- principle, Reading (LM3)
practice, impact on asset valuation (BR4)

Valuing-Case 6,7

Negotiation, project cost estimation Note-Case 8

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Risky projects-Case
9

Project Assignment presentation and project

7-8
presentation report presentation

Additional Instructions (If any)

Group Project

Max no. of people in the group: 4

By the end of Second session, the group shall submit a three-page proposal with respect to
preparing a project finance report. Thereafter, the project report will have to be submitted in
two stages: after 5thth session; after 9th session; and after 8thth session (Final report). The
final presentation will be scheduled during 7th and 8th sessions.

Of the 35 per cent weightage 5 percent is for the proposal, 10 per cent for the presentation and
20 percent for the report. Class participation in project carries 15% weightage (individual)
will be added to the project weightage.

The Presentation has to be made by all the members of the group; absentees do not get marks
for the project presentation

Final Project Report Format

There is no format. However, submission will be graded based on the innovations suggested
and growth opportunities suggested.

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