Project Appraisal & Financing

Credits: 4 Course Code: MBA2F01

Course Description
This course deals with the process, risk, and sources of project finance.

Course Objective
 To create an understanding of the process, criteria and the appraisal methodology for
projects.
 To prepare and understand the concepts of project feasibility reports.
 To have a clear understanding of project financing techniques.
Unit-1: Introduction to Project Finance
Projects: Characteristics, types, Project life cycle, Project identification, Idea generation,
Project screening techniques, Focus on SOW, WBS, Responsibility Matrix, Project financing
vs corporate financing, Tax and accounting consideration in SPV

Unit-2: Project Appraisal and Risk

Analysing project viability, Technical feasibility, Economic viability, Project risks:
Technological, economic, currency, political, environmental, Managing Project risks: scenario
analysis, sensitivity analysis, Role of contract and agreements in risk mitigation

Unit-3: Project Financing

Preparing project financing plan, DCF analysis, cost of capital, financial modelling and project
evaluation, using real options analysis to evaluate a project

Unit-4: Sources of Funds

Committed investment funds, Pooled equity funds, long- term debt market, Commercial banks,
Life insurance, provident funds, International agencies, structured finance

Unit-5: Miscellaneous
Social cost benefit analysis, Contract management, Infrastructure projects. Sukuks, Any other
topic of relevance

Text and References

1. Chandra P. (2015). Projects: Planning, Analysis, Selection, Financing and
Implementation and Review. 8th ed., McGrawHill
2. Patel B. (2016). Project Management. 2nd ed., Vikas Publishing
3. Finnerty J. D. (2015). Project Financing, 3rd ed., John Wiley & Sons
4. Yescombe E. R. (2013). Principles of Project Finance, 2nd ed., Elsevier.
5. Fight A. (2005). Introduction to Project Finance, 1st ed., Elsevier.