This website uses cookies to ensure you have the best experience. Learn more

Project Financing Essay

1195 words - 5 pages

Short Notes on Infrastructure Projects.
“Imagine one lived in a place where there were no pipes to carry water to your faucet and your toilet, no pipes to carry away your waste, no wires to power your appliances and computers and to light your home, no wires to carry telephone conversations and your internet messages, no roads on which to drive, no railroad tracks to guise trains, and no bridges to cross rivers, Would that be a place where you would want to live?”. These according to Matthy Levy and Richard Panchyk (2000 Engineering the City; How Infrastructure Works), is the story of infrastructure which teaches us about the history of human development from the ...view middle of the document...

1.1 Infrastructure Projects vs. PPPs (Public-Private Partnerships)
Traditionally, infrastructure projects in Kenya were owned and managed by the government or a government undertaking. Given the massive investments required in infrastructure, which plays an important role in economic development, there is now a broad consensus that private sector participation in this activity must be encouraged, hence, the development of PPP’s.
Private initiative in infrastructure projects can take many forms ranging from contracted operation of public utilities to full ownership, operation and maintenance of these facilities. Some of the principle objectives of promoting private investment in the development and operation of infrastructure projects are ensuring greater economic efficiency and better availability of the facility itself. Infrastructure projects are either more or less suitable for private participation and the level of such participation can be varied to reflect the same. Projects that are designed to provide significant social benefits such as low cost urban transportation systems may be more suited to traditional government ownership, whereas projects that have strong commercial attraction, like telecommunication, are more suited for private sector involvement. This is according to Grimsey, Dand Lewis, M.K. (2004) Public Private Partnerships: The Worldwide Revolution of Infrastructure Provision and Project Finance.

1.2 Characteristics of Infrastructure Projects
According to Hayes, Brian (2005). Infrastructure: the book of everything for the industrial landscape (1st Ed.). New York City: Norton; Infrastructure is comprised of highly heterogeneous assets with no two having identical attributes. It is an amalgamation of varying sectors including roads, bridges, dams, ports, airports, power generation and distribution, transmission of electricity, water, gas and utilities. Each sector has its own distinct performance behavior. The performance of infrastructure assets is also closely tied to the stage of the asset lifecycle i.e. Greenfield development versus mature infrastructure asset with proven demand patterns. Despite these differences, infrastructure assets have certain traits in common; Inelastic Demand, Monopoly, Stable Cash Returns, Long Durations, Inflation Hedge and Hybrid Assets.
Benefits of infrastructure projects to other wide sectors of the economy for example, roads facilitate smooth movement of people and goods from point “a” to point “b”, but other benefits spring out such as spurs economic growth such as create employment for road maintenance and garages, development of manufacturing industries e.g. automobiles, cause structural changes in economic models e.g. “just in time delivery” brought about by smooth movement, establishments of learning institutions e.g. Kampala University in Kiengu – Maua – Meru County thus stimulating academic developments and growth of the local populace and social cohesion since...

Other Papers Like Project Financing

Debt Versus Equity Essay

517 words - 3 pages Debt Versus Equity Financing Debt versus Equity Financing is an interesting subject in that it is one of the most important decisions a company will face when choosing to finance a new project. Debt Financing is a more traditional approach. In Debt Financing a company seeks financing from a financial institution or a private debt through a group of investors in the form of a loan. The loan will have set terms such as interest, repayment

Business Essay

381 words - 2 pages to provide an in-depth analysis of the financing used to cover the cost of the stadium/arena construction. Analyze the facility’s website. (Call-ups: financial; press releases; investment relations; management; corporate governance & responsibility; etc.) * Identify and discuss the different financing options used to construct the facility and/or services that the ownership group engaged in order to get the stadium/arena project

Project Finance

2029 words - 9 pages Project Finance By Godfred Kwame Abledu Abstract Project financing is largely an exercise in the equitable allocation of a project’s risks between the various stakeholders of the project. Indeed, the genesis of the financing technique can be traced back to this principle. Roman and Greek merchants used project financing techniques in order to share the risks inherent to maritime trading. A loan would be advanced to a shipping merchant on


428 words - 2 pages Project Finance The Methodology most used to finance capital-intensive projects was called project financing, and the field was called project finance. Characteristics There were many definitions of project fiance, but almost all of them had the following key characteristics. The main feature is the creation of a Special Purpose Vehicle (SPV), a bankruptcy-remote entity that remained secure if the parent company went under. The SPV has

Great India

2308 words - 10 pages MB 00016 FUNDAMENTALS OF INFRASTRUCTURE PROJECT FINANCING SET 1 Q1. Explain the concept of new infrastructure funds. Private financing is needed to ease the burden on government finances; it will encourage better risk sharing, accountability, monitoring and management in infrastructure provision. After decades of severe regulatory restriction, private enterpreneurship in infrastructure bounced back in two ways during the late 1980s

How to Finance a Property Development Project

983 words - 4 pages How to finance a property development project Whether you are thinking about property development for the first time or you are an experienced developer looking for some new ideas, the financial basics are always the same. To make a profit the developer must: 1. Understand all the costs involved in both the acquisition and build phases, 2. Accurately assess the potential sales price and 3. Manage the finances to project completion

Flash Memory

653 words - 3 pages also be increased. Future gross margins could also increase. This increase may allow us to not need as much external financing as we have used in the past. The value of the project could also increase the assets. An increase in assets could lead to higher equity if liabilities stay the same or increase by an amount less than the increase of our assets. With a higher equity value, we could investigate selling more equity to use as a source of

Cp1 Project

656 words - 3 pages Assume you are the project manager for a new business venture. This venture will require financing, but once completed, will generate revenue and, eventually, a profit over cost. For CP-1, you are to write a Project Proposal with enough detail to convince investors to finance your idea. This Project Proposal will require detailed cost and revenue estimates and a credible schedule to win investor support. Select a venture of personal interest

Financing Strategy

904 words - 4 pages Running Head: Financing Strategy John Smith Grace University (This a financing strategy document written in APA and relying on two sources. The document proposes a fixed rate, non-recourse construction-permanent loan of $75 million that will be sought from experienced lenders to finance the 100-unit apartment building project.) Financing Strategy Document I. Preamble The proposed company will be a development firm which will

Fitt Case Study

887 words - 4 pages • Project financing TF Ch 1-19 Exercise 2 Review the characteristics of a confirmed documentary letter of credit. Consider its value to an exporter in Ghana dealing with an importer in France, through BNP Paribas (a major international bank based in France). Next, assess its contribution to a transaction involving U.S. exports to Tanzania, facilitated through a letter of credit issued by the First National Bank of South Africa

Creative Financing

383 words - 2 pages . ICICI Bank was established by the Industrial Credit and Investment Corporation of India, an Indian financial institution, as a wholly owned subsidiary in 1955. The parent company was formed in 1955 as a joint-venture of the World Bank, India's public-sector banks and public-sector insurance companies to provide project financing to Indian industry. ICICI Bank met with microfinance - aid groups working with the poor and decided to give them capital

Related Essays

Ppp And Project Financing In Logistics Infrastructure

2337 words - 10 pages Project Finance and Private Public Partnership in financing logistics infrastructure. Introduction Finance scholars acknowledge a clear-cut distinction between corporate finance and project finance. The two techniques are considered as basically different approaches to the problem of raising debt to fund capital investments. In corporate finance lenders assess the creditworthy of a whole company, evaluating the going concern, the full range of

Financing The Mozal Project Case (Hbs 9 200 005)

4213 words - 17 pages different conceived risks, Sovereign risk was the most important one, Gencor/Alusaf chose to finance the project via project financing, as opposed to corporate financing, in order to minimize their risk exposure and be able to raise capital. Project was structured in a way to ensure that an expropriation would have international consequences, and also lenders would be comfortable enough to participate in the project. Namely, existence of

Project Report On: Strategic Planning, Financing And Implementing A Preliminary Implemantation

1618 words - 7 pages | ECI PROJECT PLAN2014-15 | bcorp | [Date] | [Course title] | | | ECI PROJECT PLAN2014-15 | bcorp | [Date] | [Course title] | | PROJECT REPORT ON: STRATEGIC PLANNING, FINANCING AND IMPLEMENTING A PRELIMINARY IMPLEMANTATION IN “EXOTIC CAR INC (ECI) FOR 03 YEARS”. With this project report we are explaining about the project strategic plan, analysis, appraisal, finance and preliminary implementation for initial 03

Patricia's Doc Essay

1001 words - 5 pages volatility of the Real, despite recent success in mitigating hyperinflation, 2) Political / financial risk surrounding tariff and non-tariff barrier increases, 3) The difficulty in acquiring local skilled labor, 4) The uncertainty of profitability, as profits have been impeded by aggressive pricing designed to gain market share, and 5) The high degree of leverage associated with supplier financing. 2) Based on the five-year life of the project