Course Description

Infrastructure may be considered as the backbone of prosperity and a prerequisite of development. The global financing needs for infrastructure are large, roughly estimated at US$ 100 trillion between 2015 and 2030. An increasing and significant proportion of infrastructures assets are privately owned or operated. Global institutional investors and major funds managers are keen to expand investment strategies that approach infrastructure as a class asset. The course provides a succinct but comprehensive overview of the political economy of infrastructure project finance with the following four modules: (1) Political Economy of Infrastructure; (2) Project Finance ; (3) Structuring and Financing of Large Scale Infrastructure Investments ;(4) Project Financing in Developing Countries and emerging Markets .

Course Objectives

The objective of the course is to provide an understanding of infrastructure investment as a major contribution to the creation of wealth and prosperity while at the same time broadening the understanding of global Finance through overviews and case studies of project finance, emerging markets and international capital ventures as well as Public Private Partnerships. The course will discuss social, environment and climate impact of large infrastructure investments. It will also provide an overview of Islamic Finance.

The course is intended to students who will be involved at any stage of infrastructure investment process in Corporate or Government sponsored agencies, who will be transaction advisors (investment or commercial bankers, regional or global multilateral bankers, consulting firms or investors) responsible for making money through debt/equity balancing or fund management.

Course Requirements

The syllabus includes cases, technical notes, and articles. Presentation of the 4 modules, case studies and reference material will be in English. Discussion, interactions will be in English and French.

Evaluation will be based on participation and a paper on a topic related to global infrastructure investment which will be written in groups of students.

Overview

Module 1:  Political Economy of Infrastructure

Definition and characteristics of Infrastructure

Demand for infrastructure

Urbanism: development amplifier

Infrastructure investments

Infrastructure implementation

Environment and social risks and impact

Climate Change: challenges and opportunities

Module 2: Project Finance

History and Basics

PPP and Project Finance

Structure of Project Finance

Financing Instruments

Financial modelling and Project Evaluation

Module 3: Structuring and Financing of large scale infrastructure projects

Global corporate investors:  rationale and incentives

Regional and Global Multilateral Banks: World Bank Group, Asian Development Bank , Inter American Development Bank , African Development Bank , Asian Infrastructure Investment Bank ( AIIB ) European Development Bank , New Development Bank .

National institutional operators

Challenges and Opportunities of Islamic Finance

Case Studies

Module 4: Project Financing in Developing Countries and Emerging Markets

Managing Risks and volatility

Security Arrangements

Opportunities and challenges of investments in conflict affected countries

Case studies

Resources

Textbooks:

John D. Finnerty , Project Financing , Third Edition .Wiley  Finance Series, 2013

Barbara Weber , Hans Wilhem Alfen, Infrastructure as an Asset Class , Wiley Finance, 2010

Benjamin C. Esty , Modern Project Finance , A Case book , Wiley Finance , 2006

Case Studies:

Airbus XX : Developing the World’s Largest Commercial Jet, HBS Case Studies

Nghe An Tate and Lyle Sugar Company Vietnam , HBS Case studies

Chad Cameroon Petroleum and Pipeline Project,  HBS Case studies

Lao PDR Nam Theum II

Euro Tunnel

Texas High Speed Train Corporation

Poland’s A2 Motorway

Hong Kong Disneyland