Project Finance - Applications and Insights to Emerging Markets Infrastructure

Tackle infrastructure development projects in emerging markets with confidence
 
In Project Finance: Applications and Insights to Emerging Markets Infrastructure, distinguished professor and author Paul Clifford insightfully applies the fundamental principles of project finance structuring to infrastructure investments in emerging markets.
 
Using leading emerging market case studies to illuminate the underlying themes of the book, the author provides a practitioner's perspective and incisive analysis of concepts crucial to a complete understanding of project finance in emerging markets, including:
 
* Risk management
 
* ESG and impact investing
 
* The emergence of new global multilateral development banks
 
* China's Belt and Road Initiative
 
Project Finance bridges the gap between theoretical infrastructure development, investment, and finance and the implementation of that theory with instructive and applicable case studies. Throughout, the author relies on a grounded and quantitative approach, combining the principles of corporate finance with straightforward explanations of underlying technologies, frameworks, and national policies.
 
This book is an invaluable resource for undergraduate and graduate students in finance, as well as professionals who are expected to deal with project and infrastructure finance in emerging markets.

List of contents

Preface xi
 
Acknowledgments xv
 
Chapter 1 Principles and Application of Project Finance 1
 
Origins and History of Project Finance 1
 
Why Sponsors Use Project Finance 2
 
Project Finance--Asset Class Performance 4
 
Global Infrastructure Outlook 9
 
The Infrastructure Gap in Emerging Markets 12
 
Focus--Asia Infrastructure Needs 13
 
Endnotes 14
 
Chapter 2 Project Finance--Risk Analysis and Mitigation 17
 
Commercial versus Contract Viability 19
 
Sponsor Risk 19
 
Political Risk 21
 
Construction and Completion Risk 22
 
Operation and Maintenance Risk 25
 
Supply Risks 26
 
Reserve Risk 27
 
Sales/Offtake Risk 27
 
Approvals and Permits 30
 
Social and Environmental Considerations 30
 
Financial Risks 31
 
Force Majeure Risk 32
 
Case Study: Mozal Aluminum Project, Mozambique 33
 
Endnotes 37
 
Chapter 3 Project Finance Agreements and Loan Documentation 39
 
Construction Contracts in Project Finance 41
 
Operations and Maintenance Contracts in Project Finance 42
 
Offtake Contracts/Concession Agreements 42
 
Supply Contracts 43
 
Project Finance Loan Documentation 44
 
Key Lender Protection Mechanisms and Strategies for Negotiating Finance Agreements 51
 
Case Study: Samba Drillship Oil and Gas Project, Brazil 52
 
Chapter 4 Risks and Challenges of Project Financing in Emerging Markets 61
 
Track Record of Project Finance in Emerging Markets--The Asian IPP Experience 62
 
Currency Mismatch--Lessons Learned from the Asian Currency Crisis 63
 
How the Asian Currency Crisis Transformed the Approach to Project Finance 65
 
Role of Multilateral, Bilateral Development Banks, and Export Credit Agencies 68
 
Stakeholder Alignment Issues 71
 
Mitigating Political and Sovereign Risks 71
 
Case Study: Dabhol Power Project, India 72
 
Endnotes 80
 
Chapter 5 Sources of Financing for Emerging Markets 81
 
Multilateral Development Banks (MDBs) 84
 
Bilateral Development Banks (BDBs) 85
 
Export Credit Agencies (ECAs) 85
 
Commercial Banks 87
 
Political Risk Insurance Market--Breach of Contract and Non-Honoring of Financial Guarantees 88
 
Project Bonds 89
 
Equipment Suppliers and Financing 90
 
Institutional Lenders (Insurance Companies, Infrastructure Funds, Pension Funds, Private Equity, and so forth) 91
 
Strategies for Multi-Sourced Financing in Emerging Markets 91
 
Case Study: Nam Theun 2 Hydro Project, Laos 92
 
Endnotes 99
 
Chapter 6 Financial Structuring and Debt Sizing 101
 
The Borrower/Sponsor Objectives 103
 
Lenders' Objectives 104
 
Debt Sizing and Sculpting 104
 
Financial Structuring--Debt Sizing and Loan Amortization 106
 
Lender Ratios for Debt Calibration and Stress Testing 110
 
Cash Traps and Sweeps 110
 
Case Study: Sabine Pass LNG Project and USA-Asia Energy Flows 112
 
Endnotes 117
 
Chapter 7 Environmental and Social Governance (ESG) 119
 
Sustainable Infrastructure Project Finance and Investing 120
 
Equator Principles 121
 
Multilateral Development Banks and ESG
 
Frameworks 124
 
IFC Impact Investing Principles 127
 
Green Bonds 129
 
Sustainability Project Financing and UN Social Development Goals (SDGs) 131
 
Unlocking Institutional Capital to Meet Emerging Market SDGs 134
 
Case Study: Manzanillo Container Port Terminal Proj

About the author

PAUL D. CLIFFORD is Adjunct Professor at Columbia Business School. He also teaches at The City University of New York. He is a consultant for in-house programs at international banks and private sector energy companies. Formerly, he was Director of Project Finance for Standard Chartered PLC and ANZ Bank.

Summary

Tackle infrastructure development projects in emerging markets with confidence

In Project Finance: Applications and Insights to Emerging Markets Infrastructure, distinguished professor and author Paul Clifford insightfully applies the fundamental principles of project finance structuring to infrastructure investments in emerging markets.

Using leading emerging market case studies to illuminate the underlying themes of the book, the author provides a practitioner's perspective and incisive analysis of concepts crucial to a complete understanding of project finance in emerging markets, including:

* Risk management

* ESG and impact investing

* The emergence of new global multilateral development banks

* China's Belt and Road Initiative

Project Finance bridges the gap between theoretical infrastructure development, investment, and finance and the implementation of that theory with instructive and applicable case studies. Throughout, the author relies on a grounded and quantitative approach, combining the principles of corporate finance with straightforward explanations of underlying technologies, frameworks, and national policies.

This book is an invaluable resource for undergraduate and graduate students in finance, as well as professionals who are expected to deal with project and infrastructure finance in emerging markets.

Product details

• Authors: Paul Clifford, Paul D Clifford, Paul D. Clifford, Pd Clifford
• Publisher: Wiley, John and Sons Ltd
• Languages: English
• Product format: Hardback
• Released: 26.01.2021
• EAN: 9781119642466
• ISBN: 978-1-119-64246-6
• No. of pages: 224
• Series: Wiley Finance; Wiley Finance Editions
• Subjects: Social sciences, law, business > Business > Business administration; Rechnungswesen, Accounting, Corporate Finance, Finance and accounting