INDIAN INSTITUTE OF MANAGEMENT JAMMU

Master of Business Administration Project

Finance (PF)
Term - V

Course Rationale:
It is important for management students to understand Project financing for its sheer size and its impact on the
economic development. Ignited by the changing economic priorities of the country, billions of Rupees are
invested in infrastructure every year by the Government and Private Sector. Huge investments are being made
in the development of Road and Rail networks, Urban Transportation, Electricity generation and distribution,
Energy & Power, Solid Waste management, passenger airlines; waterways, and communication sectors. This
course encompasses key principles and techniques for evaluating projects, as well as strategic, qualitative and
organizational considerations impacting project appraisal decisions.

Course Objectives: The

course aims to;

1. Help understand the project financing discipline for its sheer size and its impact on the economic
development.
2. Cover different aspects of a project from investment and financing dimensions.
3. Discuss various methods of a project appraisal and the different alternatives of financing projects, from
simple to complex models.
4. Provide an overview of contemporary developments, both in India and outside.

Learning Outcomes:
On successful completion of the course, participants would be able to:
1. Evaluate Project Cost, Sources of Financing, Estimate Profitability assess Project Viability
2. Analyze and evaluate nuances of Infrastructure Financing
3. Learn and Evaluate Public-Private Partnership Business Models (PPP) and Viability Gap
Funding VGF

Prerequisite(s):
• Corporate Finance
• Participants should be conversant with various concepts in Accounting and Finance for a better learning.
Application of spreadsheets forms an integral part of the course delivery.

Pedagogy:
A mix of pedagogical tools will be used to deliver the course like presentation , discussions, case studies, problem
solving and simulations. The evaluation includes individual and group projects, case analyses, in-class
assignments, quizzes and End-term examination.
Textbook:
• Project Finance in Theory and Practice-Designing ,Structuring , and Financing Private and Public
Projects by Stefano Gatti (Elsevier).
• Projects – Planning, Analysis, Selection, Financing , Implementation and Review – by Prasanna Chandra
(Tata Mc Graw Hill Education )
Reference Books:
• Modern Project Finance: A Case Book, Benjamin Esty [BE], John Wiley & Sons, 2014
• PPP and Project Finance: Development and Use of Financial Models, 1e, Prabuddha K. Das [PKD], Tata
McGraw Hill, 2012
• Project Financing, 2e, John D. Finnerty, Wiley India Education, 2007
Journals:
• IJ Global – Project Finance and Infrastructure Journal
• The Journal of Project Finance
• Journal of Financial Management of Property and Construction http://ppi.worldbank.og
Links to websites: majorprojects.org
www.hbs.edu/projfinportal www.pppinindia.gov.in www.projectfinancereview
www.ifc.org .com
www.loanpricing.com
Evaluation Scheme: (will be shared soon)
• Any two or more formats (Class Tests/ Quizzes/ Project/Assignments/Class
Participation/Presentations/Games & Simulation etc.) 40–50 %
• Mid-Term Exam 20-30%
• Term-End Exam 30-40%
• Total 100%
Session Plan
Session Topic (including Learning Pedag Textbook Chapters
No. subtopics) Outcomes ogical &
Tool Readings
1-2 Introduction to the Overview of the Presentation Stefano Gatti-
Theory and Practice Features of Project Finance. Illustration :Corporate Chapter -1&2
of Project Finance Understanding Finance vs Project
Concession Finance;
Agreement and Role of Sector and Subsectors in
Concessionaire India;

3 Aspects and Understand the Presentation: Case Prasanna Chandra :

Categories of broad contours of Study Analysis Chapter 3
Conventional Capital Investment :Soya peck
Financing the Analysis
Project Approach :
Investment Phase,
Operation Phase
4 Project How the Project Case Study Analysis Prasanna Chandra :
Background idea fits into the :Soya peck Chapter 4&5
and History; framework of the
Location economic
and Site; development of the
Market country
and Plant
Capacity;
materials
and
inputs; Project
Engineering ,
Plant
organization
and Manpower

5 Financial Feasibility Understanding Cost of Case Study Analysis Prasanna Chandra :

of the Project Production and :Soya peck Chapter -9
Profitability, Project Cash
Flow;
6 &7 Financial Evaluate Project Case Study :Integrated Spread Sheet Modelling
Estimates & Cost & Means of Financing Approach - Bhartiya and Sensitivity Analysis
Projections Develop profitability Aluminium Note on Sources of
Cost of Project & Projections; Equity IRR, Financing
Means of Finance RADR, CE
Profitability
Projections
Financial
Modeling
8 Role of Role of Legal Advisors Presentation , and Stefano Gatti-
Advisors in Role of Independent understanding RFP and Chapter -4;
Project Engineer in Project RFQ ; Case on Documents
Finance Finance Deal Infrastructure Sector:
Deal Power Sector Project

9&10 Valuing the Project Analysis of Operating Analysis of Power Stefano Gatti-
and InfrastructureCash Flows and their Project Chapter -5
Project Cash Flow Behaviour in Different :Financial Viability
Analysis Regulation of Tariff;
Project Life
Cycle Evaluation of
Phases Renewable Power
Project.
11 Legal Aspects of The Project Company ; Presentation and Stefano Gatti-
Project Finance The Contract Structure; Discussions Chapter -7;
Project Document ; Note to be circulated
The Credit Agreement; on the Indian Legal
Security Documents Framework .
and Other Finance
Documents
12 Financing the Deal Advisory and arranging Presentation and a Stefano Gatti-
activities for Project Case on Infrastructure Chapter -6
Financing; Sector
Funding Options;
13 Financing the Deal Bilateral and Multilateral Presentation and a Stefano Gatti-
:Bilateral and Agencies involvement ; Case on Infrastructure Chapter -6
Multilateral Senior Debt ; Project Bond Sector
and Defining Default

14 PublicPrivate Understand and Class Discussion Public Private Partnership

Partnership Analyze various PPP Presentation and Projects in India-
Typical Project Business Models Cases: Government of India
configuration- Ministry of Finance
Key project (i)Nava Sheva Department of Economic
parties-Project
International Affairs & World Bank
Contracts
Container Terminal
(ii)Kakinada Deep
Water Port

15 PublicPrivate Understand and Class Discussion Public Private Partnership

Partnership Analyze various PPP Presentation and Projects in India-
Typical Project Business Models Cases: Government of India
configuration- Ministry of Finance
Key project Latur Water Department of Economic
parties-Project
Supply Project Affairs & World Bank
Contracts
16 PPP- Project Understand and Case: Public Private Partnership
Models BOT, Analyze various PPP (i)Mumbai Metro Projects in India-
BOOT, BOLT Business Models Government of India
(ii)Gangavaram Ministry of Finance
Port Department of Economic
Affairs & World Bank

17 PPP- Project Analyze various PPP Case: Public Private Partnership

Models BOT, Business Models Projects in India-
BOOT, BOLT (iii)Salt Lake Water Government of India
Supply and Sewage Ministry of Finance
Disposal system Department of Economic
(BOT) Affairs & World Bank
(iv)Hybrid Annuity
Model

18 Project Identifying Project Risks; Presentation and a Stefano Gatti-

Characteristics, Risk Post Completion Phase Case on : Chapter -3
Analysis , and Risk Risks; Risks in pre and post Vadodara - Haloll
Management completion phases. Tollways
Risk Allocation with
Contracts stipulated by
SPV.

19 Project Identifying Project Risks; Presentation and a Stefano Gatti-

Characteristics, Risk Post Completion Phase Case on : Rapid Chapter -3
Analysis , and Risk Risks; Risks in pre and post Metro Rail
Management completion phases. Service
Risk Allocation with
Contracts stipulated by
SPV.

20 Presentation by International Case on : (i)Euro Stefano Gatti-

Students on Cases Infrastructure Projects Tunnel; Chapter -8
(ii) Euro Disney.