The course is about financing, valuing, and structuring infrastructure projects. We will cover a wide range of sectors including energy, transportation, telecommunication, and social infrastructure. The course is applied and involves various international case studies. We will focus on the role of the private sector in financing and investing in infrastructure, considering the perspectives of both equity and debt investors. At the same time, the public sector's perspective will also be considered; an understanding of the government's role in infrastructure provision is crucial for private investors.
The first part of the course introduces students to project financing, a unique mechanism for financing large-scale investments. Project finance involves the creation of an independent project company. We will consider how to optimally structure project finance deals, including the determination of a project’s debt capacity as well as risk management (e.g. of political risk). Another part of the course deals with public-private partnerships, which involve contracting between the public sector and the private sector for the provision and management of infrastructure projects (e.g. a toll road). We will study what makes for a successful public-private partnership. Finally, we will consider infrastructure investments as an asset class for institutional investors such as private equity firms.
The aim of the course is to endow students with practical tools grounded in rigorous financial analysis. We will in particular draw on corporate finance tools (e.g. spreadsheet models on the valuation side). Relevant basic tools and concepts of corporate finance, on which the course builds, will be briefly reviewed at the beginning of the course to refresh students' knowledge.