"Project finance is the long-term financing of infrastructure and industrial projects based upon the projected cash flows of the project rather than the balance sheets of its sponsors."
Studies the methods of financing and investment that can be used in PPP arrangements, including traditional bank loans, bonds, and project finance structures.
Basic Finance Concepts: The principles of finance such as time value of money, present and future value, annuity, per annum interest rate, and the effects of inflation on investments.
Investment Theory: Different types of investment theories, such as modern portfolio theory, efficient market hypothesis, behavioral finance, and asset pricing model.
Financial Markets: Understanding the different types of financial markets such as money market, bond market, and equity market.
Financial Instruments: Different types of financial instruments such as stocks, bonds, mutual funds, exchange-traded funds (ETFs), and options.
Financial Statements & Analysis: How to read and interpret financial statements such as balance sheet, income statement, and cash flow statement to determine the financial health of an organization.
Capital Budgeting: Techniques used to evaluate and analyze potential long-term investments such as net present value (NPV), internal rate of return (IRR), and payback period.
Risk Management: Strategies used to manage financial risks such as strategic, operational, financial, and hazard risks.
Capital Structure & Cost of Capital: The different sources of capital such as equity, debt, and the cost associated with each form of capital.
Public-Private Partnerships (PPP): Understanding the different types of PPPs such as build-operate-transfer (BOT) and build-own-operate-transfer (BOOT) and how they work.
Project Finance: How to structure and finance long-term infrastructure projects such as power plants, toll roads, and airports.
Government Finance: How governments finance their operations through taxation, borrowing, and other sources of revenue.
International Finance: Understanding the principles of international finance such as exchange rates, international trade, and foreign investment.
Behavioral Finance: How psychological factors influence investment decisions and how to use this knowledge to make better investment decisions.
Corporate Finance: Understanding the financial decisions made by companies such as capital investments, financing decisions, and dividend policy.
Portfolio Management: How to construct and manage an investment portfolio to achieve a specific investment objective while managing risk.
Equity financing: This is when an investor provides capital to a business in exchange for an ownership stake. The investor becomes a shareholder and shares in the profits and losses of the business.
Debt financing: This is when a business borrows money from a lender and agrees to pay back the loan with interest over time. This can include loans, lines of credit, and bonds.
Crowdfunding: This is a type of financing where a large number of individuals invest small amounts of money in a business, usually through an online platform.
Angel investing: This is when a high net worth individual invests in a startup or early-stage business in exchange for equity.
Venture capital: This is similar to angel investing, but is typically done by professional investment firms that specialize in providing funding to high-growth startups.
Private equity: This is when an investor or investment group provides capital to a business in exchange for an ownership stake, with the goal of improving the company's performance and then selling their stake for a profit.
Public-private partnerships (PPPs): These are agreements between the public and private sectors to collaborate on a project, with the private sector providing financing and often also managing the project.
Grants: These are funds given to a business or organization with no obligation to repay.
Convertible notes: This is a type of debt that can be converted into equity at a later date, depending on certain conditions being met.
Factoring: This is when a business sells its accounts receivable to a third-party at a discount in order to raise cash quickly.
Lease financing: This is when a business leases equipment or property instead of buying it outright, allowing them to conserve capital.
Mezzanine financing: This is a hybrid of debt and equity financing, where the lender has both a loan position and an equity position in the business.
Asset-based lending: This is when a business borrows money using its assets, such as accounts receivable, inventory or equipment, as collateral.
Merchant cash advance: This is when a business receives an advance on its future credit card sales, with interest and fees charged on the advance.
Prepaid sales contracts: This is when a business secures funding by selling future products or services at a discounted rate.
"Project finance is based on projected cash flows of the project, not the balance sheets of its sponsors."
"A project financing structure involves a number of equity investors, known as 'sponsors'."
"A 'syndicate' of banks or other lending institutions provide loans to the operation."
"They are most commonly non-recourse loans, which are secured by the project assets."
"Project loans are paid entirely from project cash flow, rather than from the general assets or creditworthiness of the project sponsors."
"The financing is typically secured by all of the project assets, including the revenue-producing contracts."
"A special purpose entity is created for each project, thereby shielding other assets owned by a project sponsor from the detrimental effects of a project failure."
"Capital contribution commitments by the owners of the project company are sometimes necessary to ensure that the project is financially sound or to assure the lenders of the sponsors' commitment."
"Traditionally, project financing has been most commonly used in the extractive (mining), transportation, telecommunications, and power industries, as well as for sports and entertainment venues."
"Risk identification and allocation is a key component of project finance."
"A project may be subject to a number of technical, environmental, economic and political risks, particularly in developing countries and emerging markets."
"Several long-term contracts such as construction, supply, off-take and concession agreements, along with a variety of joint-ownership structures are used to align incentives and deter opportunistic behaviour by any party involved in the project."
"The financing of these projects must be distributed among multiple parties, so as to distribute the risk associated with the project while simultaneously ensuring profits for each party involved."
"A riskier or more expensive project may require limited recourse financing secured by a surety from sponsors."
"A complex project finance structure may incorporate corporate finance, securitization, real options, insurance provisions or other types of collateral enhancement to mitigate unallocated risk."
"In designing such risk-allocation mechanisms, it is more difficult to address the risks of developing countries' infrastructure markets as their markets involve higher risks."
"Financial institutions and project sponsors may conclude that the risks inherent in project development and operation are unacceptable (unfinanceable)."
"The patterns of implementation are sometimes referred to as 'project delivery methods'."
"Long-term contracts and joint-ownership structures are used to align incentives and deter opportunistic behavior."