Financing Major Engineering Projects Course

Lesson 1 • Revenue Models for Engineered Assets

Surveys tolls, tariffs, power purchase agreements, and availability payments as revenue sources. Connects revenue predictability to financing feasibility.

Lesson 2 • Project Finance vs. Corporate Finance

Contrasts off-balance-sheet project finance with on-balance-sheet corporate borrowing. Students identify when each structure is appropriate for engineering ventures.

Lesson 3 • Key Participants and Their Roles

Maps sponsors, lenders, contractors, operators, and government bodies to their financial interests. Clarifies how each party's incentives shape deal structure.

Lesson 4 • Defining Major Engineering Projects

Establishes scale, complexity, and capital intensity that classify a project as major. Anchors all subsequent financing concepts to real infrastructure and industrial contexts.

Lesson 1 • Reading Project Financial Statements

Decodes income statements, balance sheets, and cash flow statements in a project context. Provides the accounting literacy needed for all subsequent modeling work.

Lesson 2 • Capital Cost Estimation Methods

Covers order-of-magnitude, factored, and detailed estimating approaches for engineering assets. Links cost estimate accuracy to financing risk and contingency sizing.

Lesson 3 • Depreciation and Tax Implications

Explains straight-line, declining-balance, and accelerated depreciation and their effect on taxable income. Shows how depreciation schedules influence project cash flows.

Lesson 4 • Time Value of Money in Projects

Applies discounting and compounding to multi-year engineering cash flows. Establishes the mathematical core for NPV, IRR, and payback calculations.

Lesson 1 • Debt Service and Coverage Ratios

Calculates principal and interest schedules and derives debt service coverage ratios. Demonstrates how DSCR thresholds drive loan sizing and covenant design.

Lesson 2 • Sensitivity and Scenario Analysis

Tests model outputs against changes in key assumptions such as cost overruns and revenue shortfalls. Quantifies downside risk for lender and sponsor decision-making.

Lesson 3 • Operations Phase Revenue and Cost Modeling

Projects operating revenues, operating expenses, and maintenance capital over the asset life. Introduces ramp-up curves and degradation factors specific to engineering assets.

Lesson 4 • Model Architecture and Best Practices

Establishes spreadsheet structure, input separation, and audit-trail discipline for financial models. Prevents common modeling errors that distort investment decisions.

Lesson 1 • Multilateral and Export Credit Financing

Examines development bank loans, export credit agency guarantees, and their role in emerging-market projects. Shows how official support reduces political and commercial risk.

Lesson 2 • Mezzanine and Subordinated Debt

Explains how mezzanine debt fills the gap between senior debt capacity and equity. Analyses payment-in-kind features, warrants, and intercreditor dynamics.

Lesson 3 • Debt Sizing and Sculpting Techniques

Applies DSCR-based and loan-life-coverage-based methods to determine maximum debt capacity. Introduces debt sculpting to align repayments with project cash flow profiles.

Lesson 4 • Senior Secured Debt Fundamentals

Covers term loans, revolving credit facilities, and their security packages in project finance. Establishes the baseline debt structure upon which all other layers are added.

Lesson 1 • Waterfall Distribution Structures

Models preferred return, catch-up, and carried interest provisions in equity distribution waterfalls. Shows how waterfall design aligns sponsor and co-investor incentives.

Lesson 2 • Optimizing Capital Structure

Balances debt and equity to minimize weighted average cost of capital while satisfying lender covenants. Applies optimization to a case study project with competing financing constraints.

Lesson 3 • Equity Return Metrics

Calculates equity IRR, cash-on-cash multiple, and payback period from project cash flow models. Demonstrates how leverage amplifies equity returns and downside risk simultaneously.

Lesson 4 • Equity Sources and Investor Types

Profiles infrastructure funds, strategic sponsors, sovereign wealth funds, and pension investors. Connects each investor type to its return requirements and holding period preferences.

Lesson 1 • Risk Taxonomy for Engineering Projects

Categorizes construction, operational, market, political, and force majeure risks specific to engineered assets. Provides a structured vocabulary for risk discussions with lenders and insurers.

Lesson 2 • Risk Matrix and Mitigation Planning

Integrates identified risks into a structured matrix with owners, mitigants, and residual exposure. Produces a bankable risk summary document used in lender presentations.

Lesson 3 • Contractual Risk Allocation Mechanisms

Examines fixed-price EPC contracts, performance guarantees, and liquidated damages as risk transfer tools. Links contract structure to lender bankability requirements.

Lesson 4 • Insurance and Financial Risk Mitigation

Surveys construction all-risk, business interruption, and political risk insurance products. Demonstrates how insurance coverage affects lender security requirements.

Lesson 1 • Term Sheet Negotiation and Structure

Deconstructs term sheet components including pricing, covenants, conditions precedent, and security. Develops negotiation strategies for sponsors and lenders at the term sheet stage.

Lesson 2 • Loan Agreement and Security Documents

Explains common terms, representations, covenants, and events of default in project loan agreements. Connects each clause to the underlying risk it addresses for lenders.

Lesson 3 • Conditions Precedent to Financial Close

Lists and sequences the legal, technical, and financial conditions that must be satisfied before drawdown. Identifies common closing delays and strategies to resolve them efficiently.

Lesson 4 • Due Diligence Process

Outlines technical, legal, financial, and environmental due diligence workstreams run by lender advisors. Shows how due diligence findings reshape financing terms and risk allocation.

Lesson 1 • Refinancing Rationale and Timing

Identifies triggers for refinancing including improved credit profile, lower interest rates, and tenor extension. Models the net present value benefit of refinancing against transaction costs.

Lesson 2 • Portfolio Financing and Aggregation

Structures portfolio-level financing across multiple projects to achieve diversification and scale benefits. Introduces securitization and platform financing as advanced aggregation tools.

Lesson 3 • Secondary Market Transactions

Explains loan syndication, loan trading, and infrastructure equity secondary market transactions. Shows how secondary market liquidity affects primary financing terms and investor appetite.

Lesson 4 • Debt Restructuring in Distressed Projects

Applies debt restructuring tools including maturity extension, debt-for-equity swaps, and haircuts. Examines lender and sponsor negotiation dynamics in distressed project scenarios.