[LIVE] Construction Fundamentals: Project Finance and Public/Private Partnership (P3)

Includes a Live Event on 09/22/2021 at 12:00 PM (EDT)


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This class will provide an introduction to the principles of project finance. The class will explain why sponsors are interested in using project finance to deliver major capital projects. Advantages of project finance will be discussed in comparison with corporate finance. This class will help students identify candidate projects that are most appropriate for meeting the essential criteria for project financing. Students will be introduced to typical project finance structures and learn how to develop and evaluate an appropriate financing structure for a capital project. Main sources of equity and debt will be discussed in the class, such as commercial banks, equity investors, bond markets, and leasing. Financial cash flow modeling, such as net present value (NPV) and internal rate of return (IRR), will be reviewed as investment analysis tools to evaluate project financing under uncertainty. Risk management will be utilized to identify, analyze, and mitigate project financing risks. Public-Private Partnerships (P3s) will be presented as an innovative project financing method to assist governments deliver their capital programs. The class will discuss why and when P3 should be considered as an appropriate option for project financing. Students will become familiar with special purpose vehicle (SPV) and key contractual structure of a P3 arrangement. Sources of P3 project financing and arrangements for debt repayment will be introduced to students. Key financial metrics will be presented for financial viability analysis of P3 initiatives. The principles of value for money (VfM) analysis will be discussed to evaluate financial risks for P3 projects.

Dates

  • Wednesday, September 15 12:00-2:00 PM EDT
  • Wednesday, September 22 12:00-2:00 PM EDT
  • Friday, September 24 3:00-5:00 PM EDT
  • Monday September 27 12:00-2:00 PM EDT


Pricing

  • ULI Members: $395.00
  • ULI Members (Government/NonProfit/Academic): $350.00
  • Non-Members: $525.00

When you register for one course in our new Construction Fundamentals series, you’ll unlock 15% off the rest.

Construction Fundamentals: Project Funding and Financing

Overview

This class will provide an introduction to the principles of project finance. The class will explain why sponsors are interested in using project finance to deliver major capital projects. Advantages of project finance will be discussed in comparison with corporate finance. This class will help students identify candidate projects that are most appropriate for meeting the essential criteria for project financing. Students will be introduced to typical project finance structures and learn how to develop and evaluate an appropriate financing structure for a capital project. Main sources of equity and debt will be discussed in the class, such as commercial banks, equity investors, bond markets, and leasing. Financial cash flow modeling, such as net present value (NPV) and internal rate of return (IRR), will be reviewed as investment analysis tools to evaluate project financing under uncertainty. Risk management will be utilized to identify, analyze, and mitigate project financing risks. Public-Private Partnerships (P3s) will be presented as an innovative project financing method to assist governments deliver their capital programs. The class will discuss why and when P3 should be considered as an appropriate option for project financing. Students will become familiar with special purpose vehicle (SPV) and key contractual structure of a P3 arrangement. Sources of P3 project financing and arrangements for debt repayment will be introduced to students. Key financial metrics will be presented for financial viability analysis of P3 initiatives. The principles of value for money (VfM) analysis will be discussed to evaluate financial risks for P3 projects.

This course is part of our Construction Fundamentals Package.

Learning Objectives

  • Describe the principles of project finance and summarize its historical perspective
  • Identify financing types (Public, corporate, and project finance)
  • Examine main differences between corporate and project finance
  • Explain contamination risk and co-insurance effect
  • Name key characteristics of a project finance deal
  • Classify and discuss sponsors of a project finance deal
  • Describe typical contractual schemes used in a project finance deal
  • Describe fundamentals of public-private partnerships (P3s)
  • Identify types of P3 projects
  • Discuss advantages of P3s and indicate P3 potential challenges 
  • Evaluate P3 financial models
  • Conduct P3 financial viability analysis and apply Value for Money (VfM) analysis 
  • Prepare financial modeling and develop cashflow analysis models
  • Name valuation methods
  • Analyze the viability of the capital structure
  • Select a proper financial structure
  • Determine cost of capital
  • Perform financial risk analysis
  • Distinguish between project funding and project financing
  • Summarize alternative project funding sources
  • List funding options and recommend their appropriate uses
  • Describe risk management in project finance
  • Define risk allocation principles and characterize best practices for risk mitigation strategies over project lifecycle

Course Outline

  • Introduction to project finance
    • Definition of project finance
    • A historical perspective
    • Principles of project finance
  • Financing types
    • Public finance
    • Corporate finance
    • Project finance
  • Project finance deal
    • Sponsors of a project finance deal
    • Financial structure
    • Typical contractual schemes
    • Key parties in a project finance deal
    • Lenders’ main concerns in project finance
  • Financial modeling
    • Cashflow analysis
    • Model inputs
    • Valuation methods
  • Valuing the project
    • Operating cash flow
    • Estimating project cash flow
    • Direct and indirect investment costs
    • Taxes and macroeconomic indicators
    • Defining a project’s capital structure
    • Waterfall structure for using operating cash flows
    • Selecting a proper financial structure
    • Analyzing the viability of the capital structure
    • Cost of capital
    • Net present value (NPV) analysis
    • Debt cover assessment
    • Financial risk analysis
  • Assessment of corporate vs. project finance
    • Main differences in the cost of capital 
    • Contamination risk
    • Co-insurance effects
    • Benefits of project finance
  • Project funding alternatives
    • Project funding vs. project financing
    • Alternative project funding sources
  • Funding options
    • Equity
    • Debt
    • Refinancing the project deal
  • Leasing
  • Project bonds
    • Categories of project bonds
    • Use of project bonds
    • Project bond issue
  • Public-Private Partnerships (P3s)
    • Introduction to P3s
    • Types of P3s
    • Advantages of P3s
    • Challenges related to P3s
    • Risks of P3s
    • Value for Money (VfM) analysis
    • Public sector comparator (PSC)
  • P3 Financing Strategies
    • Critical dimensions of an effective financing strategy
    • Options for enhancing credit or the feasibility of a P3 project
  • Risk management in project finance
    • Overview of risk management process
    • Risk identification and allocation
    • Categories of project financing risks
    • Risk allocation principles
    • Risk mitigation strategies over project lifecycle

All content is available for 90 days from first access. For extension inquiries, please email learning@uli.org.

ULI Learning is provided by the Urban Land Institute.

Topics

Construction

Development

Experience Level

This course is designed for all experience levels.


Career Stage

This course is designed for all career stages.

Course Format

This course is delivered in four live sessions:

  • Wednesday, September 15 12:00-2:00 PM EDT 
  • Wednesday, September 22 12:00-2:00 PM EDT 
  • Friday, September 24 3:00-5:00 PM EDT
  • Monday September 27 12:00-2:00 PM EDT

Baabak Ashuri

Professor

Georgia Tech School of Building Construction

Baabak Ashuri is a Professor in Schools of Building Construction, and Civil & Environmental Engineering, and Fellow of Brook Byers Institute for Sustainable Systems at Georgia Tech. His research has focused on Quantitative Methods for Construction Engineering and Infrastructure Management with important contributions in the areas of construction analytics, innovative project delivery, and evaluation of sustainable and resilient infrastructure systems. He has 180 publications, including 54 refereed-journal papers, and secured $8.5M funding from NSF, FHWA, USDOT, USDOE, CII, GDOT, and LTRC, to name a few. The impact of Ashuri’s research was recognized by several awards (CII/FIATECH Outstanding Early Career Researcher, ASCE Thomas Fitch Rowland, ASC National Research Faculty, DBIA Distinguished Leadership, and AASHTO High-Value Research “Sweet Sixteen”). Ashuri has chaired the ASCE Construction Research Council (CRC) and served on the ASCE Construction Institute (CI) Board of Governors.

Pricing

  • ULI Members: $395.00
  • ULI Members (Government/NonProfit/Academic): $350.00
  • Non-Members: $525.00
Components visible upon registration.