Corporate finance faces many challenges. Firstly, investment decisions are increasingly challenging, due to the complexity of the business environment. Secondly, climate change have brought environmental issues to the forefront of many disciplines, including corporate finance. Thirdly, issues relating to access to finance to meet climate cha nge challenges at both corporate and government level call for thinking outside the box and using innovative finance to broaden the range of sources of finance. It is in this context that project finance is making its contribution to the world of corporate finance, by opening up new, more innovative options for access to finance for companies and governments.
Project finance is defined as financing that as a priority does not depend on the soundness and creditworthiness of the sponsors, namely, parties proposing the business idea to launch the project. Approval does not even depend on the value of assets sponsors are willing to make available to fi nancers as collateral. Instead, it is basically a function of the project’s ability to repay the debt contracted and remunerate capital invested at a rate consistent with the degree of risk inherent in the venture concerned. Project finance is the structured financing of a specific economic entity the SPV, or special purpose vehicle, also known as the project company created by sponsors using equity or mezzanine debt and for which the lender considers cash fl ows as being the primary source of loan reimbursement, whereas assets represent only collateral.
The aim of this course is to develop project finance techniques by placing the project in a broader context in which environmental issues will be considered . The aim of this course is to:
• Develop advanced understanding of the key topics in project finance, as well as the ability to understand and use project financ e concepts in the managerial context.
• Familiarize students with innovative finance and equip them with analytical tools that broaden the horizon of corporate investment and financing decisions.
• Develop the ability to understand, critically analyze and evaluate the financing decisions in the light of sustainable finance .
This course develops three major aspects of corporate finance:
• Introduction to Project Finance
• Project Characteristics, Risk Analysis, and Risk Management
• Market for Project Finance: Applications and Sectors
• Valuing the Project and Project Cash Flow Analysis
• Sustainable finance and proje ct investment decision
• Credit Risk in Project Finance Transactions
• Case studies
The course will be delivered in modules. Each module will be followed by a case study in order to deepen the understanding of the subject matter and to help students better assimilate the tools developed in the course.
• Corporate finance : theory and practice, Fifty Edition, Vernimmen et al., (2017), Wiley., • Project Finance in Theory and Practice Designing, Structuring, and Financing Private, and Public Projects Stefano Gatti . Academic Press 2018., • Powerpoint presentations, case studies and working documents on http://icampus.univ, catholille.fr.