Project Finance approach is an important financing mechanism because of its intrinsic features and differences with respect to the conventional corporate finance. It has experienced a rapid development and growth in the last decades both in developed and developing countries. The aim of this dissertation is to study and deepen the Project Finance in Emerging Markets framework.
After a brief introduction of the main general features of this approach, it will focus on the developing countries context: the historical evolution overview, the risks evaluation, the international institutions involved and the economic impact of project finance in this scenario. Furthermore, financial feasibility study will be conducted in order to evaluate a project over several financial and economic aspects.
Finally, all these theoretical issues will be empirically applied to the PMESA case study. It regards a hydroelectric power plant built in Brazil in the early 2000s through the project finance approach. The project evaluation is time located in these years because Brazil was considered an emerging market and it presented some peculiar economic and financial characteristics.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Theoretical Structure of Project Finance
- Definitions and Characteristics
- Subjects and Contracts Involved
- Sponsors
- Project Company
- Lenders
- Public Authority
- Off-takers
- Constructor
- Operator
- Project Finance in Developing Countries
- The Evolution of Project Finance
- Project's Risks and Their Mitigation
- Financial Institution Involved in Project Finance
- International Financial Institution
- Regional Development Banks
- Development Agencies
- Export Credit Agencies
- The Economic Impact of Project Finance in Emerging Markets
- Feasibility Studies of Project Finance in Emerging Markets
- Internal Rate of Return
- Cost of Capital
- Cost of Equity
- Cost of non-Equity Component
- Net Present Value
- Payback Period
- Debt Service Cover Ratio
- Loan Life Cover Ratio & Project Life Cover Ratio
- Special Focus: Dynamic WACC
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This dissertation aims to comprehensively analyze Project Finance in Emerging Markets. It explores the framework's unique characteristics, its historical evolution in developing countries, risk assessment methodologies, the roles of key international institutions, and its broader economic impact. A case study of a hydroelectric power plant in Brazil will empirically illustrate the theoretical concepts.
- Characteristics and application of Project Finance
- Risk assessment and mitigation strategies in emerging markets
- Role of international institutions in Project Finance
- Economic impact of Project Finance on emerging economies
- Feasibility study methodologies applied to Project Finance
Zusammenfassung der Kapitel (Chapter Summaries)
Introduction: This introductory section lays the groundwork for the dissertation, providing a concise overview of the project finance approach and its significance as a financing mechanism, particularly in contrast to traditional corporate finance. It sets the stage for a deeper exploration of project finance within the context of emerging markets, highlighting the dissertation's core objectives and the structure of the following chapters.
Theoretical Structure of Project Finance: This chapter delves into the fundamental aspects of project finance, defining its key characteristics and differentiating it from conventional corporate finance approaches. It meticulously outlines the various participants involved in a project finance undertaking, including sponsors, project companies, lenders, public authorities, off-takers, constructors, and operators. The chapter carefully analyzes the roles, responsibilities, and interrelationships between these stakeholders, creating a comprehensive framework for understanding the complex dynamics of project finance transactions.
Project Finance in Developing Countries: This chapter shifts the focus to the application of project finance in developing countries. It provides a detailed historical overview of its evolution in these contexts, examining the changing landscape of project finance and its adaptation to the unique challenges and opportunities of emerging markets. The chapter further explores the various risks associated with project finance in developing countries, detailing the specific financial, economic, political, and regulatory risks that need to be addressed and the strategies available for their mitigation.
Feasibility Studies of Project Finance in Emerging Markets: This chapter is dedicated to the crucial aspect of feasibility studies in the context of project finance in emerging markets. It comprehensively discusses a range of financial evaluation techniques, including the internal rate of return (IRR), cost of capital (considering both equity and debt components), net present value (NPV), payback period, debt service cover ratio (DSCR), loan life cover ratio (LLCR), and project life cover ratio (PLCR). The chapter also explores the concept of a dynamic weighted average cost of capital (WACC), offering a thorough examination of the tools and methods used to assess the financial viability of projects in these dynamic environments.
Schlüsselwörter (Keywords)
Project Finance, Emerging Markets, Risk Assessment, International Institutions, Feasibility Studies, Hydroelectric Power, Brazil, IRR, NPV, WACC, Developing Countries, Economic Impact.
Frequently Asked Questions: A Comprehensive Language Preview of Project Finance in Emerging Markets
What is the purpose of this document?
This document provides a comprehensive preview of a dissertation analyzing Project Finance in Emerging Markets. It includes the table of contents, objectives and key themes, chapter summaries, and keywords. It serves as a structured overview for academic use and thematic analysis.
What topics are covered in the dissertation?
The dissertation covers various aspects of project finance, focusing specifically on emerging markets. Key themes include the theoretical structure of project finance, its evolution in developing countries, risk assessment and mitigation strategies, the roles of international institutions, and the economic impact of project finance on emerging economies. Feasibility study methodologies are also explored in detail.
What are the key themes of the dissertation?
Key themes include the characteristics and application of project finance, risk assessment and mitigation strategies in emerging markets, the role of international institutions in project finance, the economic impact on emerging economies, and the application of feasibility study methodologies to project finance.
Which stakeholders are involved in project finance?
The dissertation details the roles of various stakeholders in project finance, including sponsors, the project company, lenders, public authorities, off-takers, constructors, and operators.
What are the risks associated with project finance in developing countries?
The document highlights the financial, economic, political, and regulatory risks associated with project finance in developing countries and explores strategies for mitigating these risks.
What financial evaluation techniques are discussed?
The dissertation examines several financial evaluation techniques used in feasibility studies, such as Internal Rate of Return (IRR), Cost of Capital (including equity and debt components), Net Present Value (NPV), Payback Period, Debt Service Cover Ratio (DSCR), Loan Life Cover Ratio (LLCR), Project Life Cover Ratio (PLCR), and Dynamic Weighted Average Cost of Capital (WACC).
What is the role of international institutions in project finance?
The dissertation analyzes the involvement of international financial institutions, regional development banks, development agencies, and export credit agencies in project finance in emerging markets.
What is the economic impact of project finance in emerging markets?
The dissertation explores the broader economic consequences of project finance in emerging markets.
What is the structure of the dissertation?
The dissertation is structured into chapters covering an introduction, the theoretical structure of project finance, project finance in developing countries, and feasibility studies of project finance in emerging markets. A case study of a hydroelectric power plant in Brazil is also included.
What are the keywords associated with the dissertation?
Keywords include: Project Finance, Emerging Markets, Risk Assessment, International Institutions, Feasibility Studies, Hydroelectric Power, Brazil, IRR, NPV, WACC, Developing Countries, and Economic Impact.
- Citation du texte
- Niccolò Viti (Auteur), 2014, Project Finance in Emerging Markets, Munich, GRIN Verlag, https://www.grin.com/document/514389
