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Course Syllabus
Project Finance
Index
1. Introduction
1.1. Professional Certificate Program
1.2. Course overview
1.3. Learning objectives
1.4. What we expect from you
1.5. What you can expect from us/the course team
2.Course structure
3. Assessment
4. Resources & Tools
5. Licence
1. Introduction
Are you involved in the development and execution of (technical) projects and eager to know what it takes to fund a project successfully? Would you like to be more in touch with the latest developments in project finance and able to use these to your advantage? If so, you’re in the right place!
This course will provide you with the fundamental knowledge and necessary tools to create the optimum financing structure for your project and enhance its potential to attract funding.
The approach taken is both theoretically sound and practically relevant. This is achieved by using case studies to illustrate the topics, as well as assignments that give learners first-hand experience in what it takes to put together a financeable project.
Those who work on infrastructure and industrial projects, especially, will need to have a good understanding of how project financing works and how project investors and lenders think and assess the risks of a project.
Projects are increasingly set up through cooperation between different groups of stakeholders such as Public Private Partnerships (PPPs). Project contracts are evolving to facilitate and structure such co-operations, which has in turn led to a range of novel contracts and methods of financing.
This course is a good enhancement course for learners who successfully completed the MOOC Project Management from DelftX (MEP101x). This course builds on the basic knowledge gained in that MOOC, but deals with the financing aspects in considerably more detail.
1.1. Professional Certificate Program
This course is offered:
1 as a free course, with limited content and no verified certificate from DelftX; and
2 as a verified / paid course, with full content and the ability to receive a verified certificate from DelftX if you successfully complete all assignments.
Furthermore, students applying for the verified certificate option can be entitled to an additional Professional Certificate Program (PCP) certificate if they also pass the sister course Management of Engineering Projects (MEP101x).
Participants aiming for a certificate can register themselves here. If you wish to pursue the PCP-certificate, you can register here.
What advantages does the verified version of this course have?
Participants in the free version will only have access to the instruction video's and a few tests; a rather limited scope. Participants in the verified version of the course also have access to these items, plus:
· the Solar-to-hydrogen project, to be located in Tunisa, Northern Africa case-study assignments;
· chapters of the course book;
· live webinar with the lecturer about the case-study. You can even ask questions individually.
This full pallet of the course content has received high levels of appreciation in earlier rounds, and the price at which it is offered is quite appealing. Commercial financing courses that have a similar scope tend to charge thousands of Euro's to participants.
Do you need financial assistance? EdX offers up to a 90% discount on our verified certificates to learners who cannot afford to pay full price. Check the edX support page for financial assistance.
1.2. Course overview
This is a 5 week course mainly with individual activities, although we strongly support the idea of collaborative learning. For that we have forums in each module, where you can support each other, and the course team will pay attention to your activities there.
Except the first week, where you will find two modules, the remaining weeks you will have just one module. Each week there will be an introduction subsection, followed by 2 or 3 knowledge subsections (with videos, reading material (verified certificate only) and exercises). You will also find in each week a special section with the Case Study (verified certificate only).
In the final week, there will be a wrap-up module, after which we give you ample time (approx 5 more weeks) to finish all your outstanding assignments from the previous weeks.
1.3. What you will learn
· How to create a financing structure that will provide the best chance of successful project financing
· The optimal allocation of the roles, risks and rewards between the various project stakeholders
· Creating a financial risk management plan
· Constructing the optimal legal conditions for project financing to succeed
1.4. What we expect from you
As an online student we expect you to be an active participant, contributing to a positive atmosphere by questioning, sharing and helping out others, using the discussion forum. We encourage you to share your experiences, and actively bring examples from your own practical experience! Regarding deadlines, we recommend staying on track, in order to benefit from learning within the community.
This course is meant to be a place where you learn with, and from, others. In this sense, we'd like you to experience collaboration and peer-feedback, so please make sure you cooperate with other participants in order to enrich the overall learning experience.
When communicating with your fellow learners and course team, using the discussion forum, please make sure you take into account the Communication and Collaboration guidelines.
1.5. What you can expect from us/the course team
The course team will release the weekly content, send important announcements, monitor and answer questions on a regular basis. We'll try to have a regular presence at the forum, but as you might understand we cannot promise to quickly answer everyone. But we'll do our best ;-)!
2. Course structure
The course is organized in 5 weeks. A brief summary of each week is presented below. Detailed instructions and resources will be provided during the course.
Week 1 - Modules 0 and 1 - Introduction to Finance
First, we’ll look at financing generally to see what aspects are most important for financing to succeed (Module 1).
Topics that we will cover in this week are:
· Introduction to the course
· Finance basics (financial analysis, NPV, IRR, etc.)
· Optimizing the financing package (debt vs equity, leverage, CADS, DSCR)
Week 2 - Module 2 - Introduction to Project Finance
Then we’ll look at project financing, a specialized form of financing, that is designed to fund (technical and infrastructure) projects (Module 2).
· Specific features of project finance and how it differs from generic (corporate) financing (SPV, limited recourse financing, ring fencing)
· The parties involved in project financing
· Drivers for the Development of Project Finance
· Public Private Partnerships (PPPs); a special form of project finance
In this week, participants opting for the verified certificate will also get acquainted with a sample project – a case study of the creation of a Solar-to-hydrogen project, to be located in Tunisa, Northern Africa – that we will use throughout the course to get familiar with the topics we are covering. In the next weeks, we’ll come back to this case study to address the various aspects that arise.
Week 3 - Module 3 - Projects Risk Management
Because of the way in which project finance is structured, where money flows are restricted to the project (= ring fencing and limited recourse financing), careful management of the project risks becomes crucial for the success of the financing. In this week, we’ll focus on the system that has been developed to stabilize project cash flows and reduce the financial impact of risks.
Topics that we will cover are:
· Risk management basics
· Risk management steps in project finance
· The project finance solution to risks – contractual risk distribution
· Dealing with:
· revenue risks
· construction risks
· operational risks
· Other risks
Verified certificate participants will use the Solar-to-hydrogen project, to be located in Tunisa, Northern Africa case study to practice these risk management aspects on.
Week 4 - Module 4 - Optimizing the legal structure in project finance
By this week, we’ll have built up a good understanding of the most important financial and risk management aspects in a project financing. This week we’ll look at the standardized legal structure that has been developed to achieve all the project finance objectives. Topics we’ll cover in this week include:
· The project company (SPV)
· The finance agreements
· Security arrangements
· Incorporation of the project agreements into the financing
Verified certificate participants will be practising these legal aspects using the Solar-to-hydrogen project, to be located in Tunisa, Northern Africa case study.
Week 5 - Module 5 - Using a Project Finance Model Support the Financing
In this week you will work with the financial model in Microsoft Excel. You will learn how to create a model for your own project and apply it to convince lenders and investors.
Verified certificate participants will apply the model to the Solar-to-hydrogen project, to be located in Tunisa, Northern Africa case study, to practice optimising the project finance structure.
Week 6 - Module 6 - Wrap-up
In the final week you will have a wrap-up module of the course. In this module, we'll bring all elements together to give you a good overview. After this last week there will be a few weeks to catch up, if you have fallen behind. We will give you until April 9th 2023; 12:00 UTC to finish all your assignments from the previous weeks.
3. Assessment
The following section is for Verified Certificate Participants only. Participants of the free base course will not be graded and will not be entitled to a certificate.
This course is mainly based on self-assessment; you will be expected to grade yourselves in most of the quizzes. In choosing this assessment-system, we have tried to marry 2 conflicting requirements:
· As professionals, with no doubt busy lives outside of this course, group work with tight submission deadlines, is not realistically an option.
· At the same time, multiple choice assessment is not suitable for the subject of this course, as it would give away too much of the correct answer.
For this reason, we have chosen an assessment system, which comprises 3 phases:
1. in each practice question, you are invited to answer an open question in your own words.
2. then, you are given a hint, to check if your thoughts were correct. If not, you can amend your answer.
3. then, you will be shown the correct answer and you will be requested to grade yourself in any of three options:
· Incorrect (0% given by the system)
· Partly correct (60% given by the system)
· Totally correct (100% given by the system)
In this way, you can carefully consider the wording of your response, and still have the benefit of a grading (albeit by yourself).
We consider self-grading to be appropriate in a professional education course since, as experienced professionals, you are undoubtedly doing this course entirely for yourself, and your own development.
To receive a certificate you will need to score 75% average on the case study. All the assignments should be finished at 6th April 2023, 12:00 UTC. The weight distribution is connected to the number of questions and difficulty:
· Case study: Introduction 15%
· Case study: Applying risk management 10%
· Case study: Applying legal structuring and contract clauses 25%
· Case study: Applying a project finance model 50%
Generating an ID verified certificate
Verified certificates will be issued a few days after the end of the course, to verified participants who successfully completed the course. Certificates can be downloaded from your Student Dashboard (look for the Download button next to the name of our course). An ID verified Certificate of Achievement is available for $ 199. You can Upgrade on your edX Dashboard to Verified during the course. Once produced, a certificate cannot be reissued, hence it is very important that you verify the way in which your name appears. Check that, in your edx.org account, your name is correctly spelled, since it will appear on the final certificate.
4. Resources & Tools
Different educational resources will be available for your learning experience, depending on whether you choose the free course option, or you opt for a verified certificate from Delft Techncal University. For all participants, the educational resources will consist of video lectures and individual assignments to practice the concepts introduced. For verified certificate participants, there will be a further textbook with background reading, graded assignments, case studies and a webinar.
There is a general forum in the 'getting started' section for all students of MEP301x so you can post general doubts about the course. Then in each module you will have a dedicated forum. You may use these forums to discuss course concepts, problem-solving approaches, interesting references, or other topics related to the course. You may use it to ask questions. Besides general questions, we stimulate lively interactions with your fellow course members by actively using the discussion forum of the edX platform. The forum is moderated by the course staff and the community team.
Please observe the appropriate online etiquette as outlined in the Discussion and Collaboration Guidelines.
5. Licence
The course materials of this course are Copyright Delft University of Technology and are licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 License.
If you choose to reuse or repost DelftX course materials you must give proper attribution. Please utilize the following citation and refer to this course:
"[TITLE OF WORK –with hyperlink to material] by TU Delft / [LECTURER NAME -with hyperlink to lecturers page] is licensed under CC-BY-NC-SA 4.0. This material was created by or adapted from material posted on the course Project Finance - Funding Projects Successfully Project Finance.”
Or if it is a derivative please use following citation:
“This work [Your title] by [Your name] is a derivative of “TITLE OF WORK –with hyperlink to material] by TU Delft / [LECTURER NAME -with hyperlink to lecturers page] and (re)licensed under CC-BY-NC-SA 4.0. This material was created by or adapted from material posted on the course Project Finance - Funding Projects Successfully Project Finance.”
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