Financing and Investing in Infrastructure

Go to Course: https://www.coursera.org/learn/infrastructure-investing

Introduction

### Course Review: Financing and Investing in Infrastructure on Coursera **Overview** In an era where infrastructure demands are surging, the Coursera course *Financing and Investing in Infrastructure* emerges as a vital resource for understanding how to effectively allocate and manage financial resources in this sector. As highlighted by the OECD, the need for substantial investments—expected to total 71 trillion dollars by 2030—across various infrastructure domains—from transport to telecommunications—underscores the critical nature of this field. This course not only covers the various ways debt and equity can be utilized for infrastructure financing but also delves into the investment approaches that define this complex sector. **Syllabus Breakdown** The course is structured into six comprehensive modules, each building on the previous one to create a thorough understanding of infrastructure financing. 1. **Project Finance and the Network of Contracts**: This module sets the stage for the course by explaining project finance as a series of contracts, introducing the concept of Special Purpose Vehicles (SPVs) as instruments used in project financing. 2. **Syndicate**: Here, the focus shifts to the relationship between the SPV and its lenders. The module thoroughly examines the role of syndicates, bank relationships, and the impact of recent financial crises on syndicated loans. 3. **Risk Analysis**: A crucial module that introduces various types of risks associated with infrastructure financing. Students will learn to develop a risk matrix, a key skill for effective project management. 4. **Capital Budgeting**: This section covers the intricacies of budgeting in the construction and operational phases of infrastructure projects, ensuring students grasp the financial mechanics behind successful infrastructure investments. 5. **The Financial Sustainability of an Infrastructure Project**: In this module, learners evaluate the feasibility of projects from both shareholder and lender perspectives, focusing on profitability and key financial metrics. 6. **How Can Creditors Protect Themselves?**: An essential guide on creditor risk management, exploring the security packages SPVs offer to creditors and methods for ensuring loan repayment. The course culminates with a series of additional videos featuring real business cases followed by a final quiz that tests the knowledge acquired throughout the course. **Who Should Take This Course?** This course is ideal for finance professionals, investors, project managers, policymakers, and anyone interested in delving into the intricacies of infrastructure investment. Whether you are looking to enhance your knowledge or trying to break into the infrastructure finance sector, this course provides a solid foundation upon which to build. **Recommendation** Given the growing global emphasis on sustainable and resilient infrastructure, I highly recommend taking *Financing and Investing in Infrastructure* on Coursera. The quality of content is exceptional, taught by experienced instructors who present complex concepts in an accessible manner. The practical applications and case studies offer invaluable insights into real-world challenges, and you'll walk away with not only theoretical knowledge but also practical tools for evaluating and managing infrastructure projects. Completing this course can significantly enhance your skill set and make you a more appealing candidate in the competitive job market related to infrastructure finance. If you're ready to dive into the world of infrastructure investments and learn how to navigate the financial waters of this critical sector, this course is an excellent starting point.

Syllabus

Project Finance and the Network of Contracts

Module 1 explores the nature of project finance as a nexus of contracts. We will analyze the nature of the SPV (Special Purpose Vehicle) as an empty shell and the key contracts surrounding it (project contracts and financial contracts).

Module 2 analyzes the relationship between the SPV and its lenders. We will start from the introduction of what a syndicate is looking at the different roles performed by banks in a syndicate and the options available to organize such a syndicate. We will also look at the cost paid by the SPV for the organization of the financing and reflect on how the recent financial crisis has reshaped the syndicated loans market.

Module 3 introduces the topic of risk in infrastructure financing. We will introduce a possible risk taxonomy (pre-, post-, and both pre- and post-completion risks) useful for analyzing risk as a preliminary step for its allocation to the parties best able to manage and control risk. Our final learning outcome will be the preparation of a risk matrix for an infrastructure project.

Module 4 introduces capital budgeting of infrastructure deals. Firstly, we will present the key elements making up the budget of the construction phase and the sources of finance used for the construction of said infrastructure. We will then move on with the analysis of the budgeting of the operational phase pointing our attention to the sources and uses of funds. Special care will be given to the analysis of the system of reserve accounts of the SPV.

Module 5 covers whether an infrastructure project is doable or not from the dual perspective of the shareholders and lenders. We will answer this question in the module by analyzing the criteria for measuring the profitability for project sponsors and lenders. We will also look at measurements of financial sustainability and the key role played by cover ratios in disciplining the performance of the SPV.

Module 6 looks at a number of subjects that share the need for creditors to protect themselves against pathological situations of the infrastructure. We will analyze the standard security package offered by the SPV to its creditors, together with an in-depth look at the system of covenants assisting the credit agreement. We will then look at the methods used to amortize a base facility in project finance.

Here you can find the lectures on the business cases and the final quiz