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ATHENS - MP17 - Project Finance- Non Recourse Finance

Sigle: MP9324, ECTS: 2

Objectifs du cours

Hundreds of millions of dollars are required in capital expenditure, to build and develop projects such oil fields and mines, electric power stations, satellites and telecom, auto-routes and bridges. In return, revenues are highly uncertain. For natural resources such as oil and metals, they depend on commodity prices that fluctuate wildly. Over recent years, the price of crude oil has risen from about $10 per barrel to $135 while gold has risen from $250 to over $900. Similarly even if tolls can be fixed for new auto-routes, it is difficult to predict the traffic.
From a financial point of view, borrowing the funds as a corporate loan would be problematic. Small companies do not have the cash-flows to provide the guarantees required; large companies prefer to develop the projects off their balance sheets in order to keep their ratings high and their interest rates low. This has led to the development of non-recourse project financing.
These types of projects are characterised by high capital expenditures, long loan periods (often 10 - 20 years) and uncertain revenue streams. Analysing them requires a sound knowledge of the underlying technical domain as well as financial modelling skills. This is why engineers play a leading role in project finance - both in industry and in banks.
Please note that the course does not cover market finance or corporate finance (mergers & acquisitions) etc

Pré-requis

Students should be interested in industry as well as finance. Those who have a laptop computer are requested to bring it.

Programme

The aim of this course is to introduce students to non-recourse finance in general and to show them how it is applied in several important domains :

  1. Mining & Petroleum
  2. Satellites & Telecom
  3. Infrastructure
  4. Power generation

Speakers from industry and from banking will present case studies, from different points of view. As many of the projects are based in developing countries, the special problems of working in these areas will be addressed. A presentation from a credit export agency will cover this topic.

Modalités d'évaluation

During the course, students working in small groups prepare and deliver a powerpoint presentation in English on a topic related to project finance. Afterwards, they are given a 3 week period after the end of the course to submit a written report in English or in French. Marks will be based on the report content and level of understanding of the subject.

Modalités pédagogiques

The daily course programme can be consulted some ten days prior to the course, please see : www.mines-paristech.fr (under the link , Ingénieurs civils).

Equipe pédagogique

Responsable(s)
Margaret ARMSTRONG

Chargé(s) d'enseignement
Alain GALLI

Intervenant(s)
Virginia BELOUZE ; Pierre-Louis DELSENY ; Gilles GANTOIS ; Gérard LADANT ; Alain MARECHAL ; Bertrand PIGNAULT ; Nicola POCHETTINO
Sigle MP9324
Année 2ème & 3ème année
Niveau Graduate 1st year, Graduate 2nd year
Crédits ECTS 2
Coefficient 2
Nb. d'heures 37
Nb. de séances 30
Type de cours Descriptifs complémentaires
Semestre 4, 6
Période Printemps
Domaines
  • Sciences économiques et sociales
Dernière mise à jour:
20 Jun 2017 11:17 par julien