Project Finance Alternatives to Airport Infrastructure Development

1998 ◽  
Vol 4 (2) ◽  
pp. 29-37
Author(s):  
Chee Mee Hu ◽  
Adam Whiteman ◽  
Mary Francoeur
Keyword(s):  
Project Finance ◽  
Infrastructure Development ◽  
Airport Infrastructure

Mitigating Legal Risks in Nigeria's Project Finance Market

2017 ◽  
Vol 25 (3) ◽  
pp. 442-455
Author(s):  
Olufemi Soyeju
Keyword(s):  
Debt Financing ◽  
Project Finance ◽  
Infrastructure Development ◽  
Public Infrastructure ◽  
The Public ◽  
Fund Development ◽  
Legal Risks ◽  
Project Risks ◽  
Infrastructure Project

Project finance is a subset of financial techniques used traditionally in raising long-term debt financing for projects particularly in the energy and mining sectors of the economy. However, over the years, it has proved helpful in raising the required funds to drive public infrastructure projects through the public private partnership framework. By its nature, project finance is either non-recourse, or of limited recourse, to the project sponsors and hence identifying the various risks and determining who should bear these risks is the overarching essence of project finance technique. These uncertainty and risks may have significant impact on outturn costs or benefits of a particular infrastructure project. Generally, typical project finance transaction is fraught with many project risks which sometimes overlap. However, among these inherent risks there are some that are legal in nature and hence they are referred to as legal risks. So, this article seeks to interrogate the related legal risks in project finance as a financing technique to fund development of infrastructure and in particular, the procurement of critical public infrastructure assets in Nigeria and the various ways by which these risks can be mitigated to drive infrastructure development in the country.

scholarly journals Relative Importance of Risks in Hydropower Projects and Project Finance in Nepal

2021 ◽  
Vol 8 (1) ◽  
pp. 1-21
Author(s):  
Achyut Nepal ◽  
Vishnu Khanal ◽  
Ruhanita Maelah
Keyword(s):  
Project Finance ◽  
Internal Source ◽  
Infrastructure Development ◽  
Relative Importance ◽  
Local Revenue ◽  
Legal Risks ◽  
Currency Mismatch ◽  
The Government ◽  
Exchange Rate Changes ◽  
Political Turmoil

Hydropower is the sole internal source of electricity in Nepal. Since the government policy of private participation in hydropower sector launched, Independent Power Producers (IPPs) have gained significant presence under Public-Private Partnership (PPP) model of infrastructure development.  Risk management is crucial in PPP projects as mishandling of any risk threatens sustainability and may result in project failure. This study analyses four major risks including Hydropower Sector Specific Risks, Project Finance Specific Risks, Hydropower Project Financing Risks and Country Specific Political and Legal Risks. Self-administrative survey utilizing questionnaire was conducted among the IPPs and domestic Banking and Financial Institutions (BFIs). Relative Importance Indices have been used to determine the importance of each risk item. Exchange rate changes, currency mismatch between local revenue and foreign loan, cost and time overrun, inflation, political turmoil and highly volatile political environment are few of the most critical risks found. For Project Finance proper allocation of risks among the stakeholders is crucial to make the projects bankable. Findings from this study indicate no risk should be neglected and relative importance of risks is critical in allocating risks among stakeholders. This study highlights assessment and the use of RII in the process of allocation and management of risks in infrastructure projects in general and hydropower in particular.

scholarly journals The Effects of Physical Infrastructure Development in Supporting Economic Growth in North Sumatra Province

2020 ◽  
Vol 3 (2) ◽  
pp. 177-183
Author(s):  
Indah Permata Sari
Keyword(s):  
Economic Growth ◽  
Quantitative Research ◽  
Time Series Data ◽  
Positive Influence ◽  
Series Data ◽  
Infrastructure Development ◽  
Physical Infrastructure ◽  
Airport Infrastructure ◽  
North Sumatra ◽  
Important Activity

The development of infrastructure in an area is a very important activity in the context of increasing economic growth. The development of infrastructure such as road, electricity and airport are also the activities that can encourage economic growth. This research was aimed to explain the effect of the construction of road, electricity and airport infrastructure on the economic growth of North Sumatra. This research was conducted by using quantitative research. The data of this study were sourced from BPS North Sumatra and Statistics Main Book starting from 2010-2018. The data was used the time series data with the process of data by using eviews 6. The results of this research indicated a positive influence between the development of physical infrastructure such as roads, electricity and airports on the economic growth of North Sumatra.

scholarly journals Addressing Constraints for Effective Project Finance for Infrastructure Projects in Emerging Economies – the Case of Zimbabwe

2020 ◽  
Vol 4 (1) ◽  
pp. 48-59
Author(s):  
M. F. Tshehla ◽  
E. Mukudu
Keyword(s):  
Developing Countries ◽  
Developing Country ◽  
Interrater Reliability ◽  
Critical Success Factors ◽  
Success Factors ◽  
Project Finance ◽  
Infrastructure Development ◽  
Infrastructure Projects ◽  
Critical Success ◽  
The Individual

The infrastructure deficit in developing countries is vast and current developmental initiatives fail to meet the requirements. There is a need for housing, clean water, sewerage facilities, transport and telecommunications infrastructure. The development of infrastructure requires large amounts of funding, which could be a project or non-recourse finance. The levels of project finance allocated to developing countries are much smaller compared to the developed world. The purpose of this paper is to determine the critical success factors for accessing project finance for infrastructure development in a developing country, Zimbabwe. This study employed the quantitative approach using a survey questionnaire to address various aspects that are important when lenders advance project finance. The questionnaire was distributed to participating organizations comprised of lenders, borrowers and investors with the higher numbers being borrowers. These organizations include banks in Zimbabwe that offer project finance for infrastructure, Pension funds which invest in infrastructure, Multilateral agencies operating in Zimbabwe, and Municipalities of major cities in Zimbabwe. The interrater reliability of the individual factors was calculated. Also, the aggregate interrater reliability for the different attributes was determined using Cronbach's alpha value. A total of 33 factors under five attributes were identified: governmental, financing, project, special purpose vehicle, and politics and economics were identified as being critical for accessing project finance. These factors were ranked according to their significance index or importance. Only 12 factors were considered as extremely important as critical success factors for project financing in Zimbabwe. The contribution of this study is to provide government, project finance agencies, private sector and other stakeholders interested in infrastructure projects with a list of the most important critical success factors for infrastructure projects in a developing country.

Case A- GMR: diversifying for growth Case B (Sequel) – GMR: deciding future alliance strategy for airports

2016 ◽  
Vol 6 (1) ◽  
pp. 1-21
Author(s):  
Rita Dubey
Keyword(s):  
Strategic Alliances ◽  
Power Plants ◽  
Joint Venture ◽  
Operating Experience ◽  
The Philippines ◽  
Infrastructure Development ◽  
Growth Strategies ◽  
Diversification Strategy ◽  
Content Type ◽  
Airport Infrastructure

Subject area General Management/Strategy. Study level/applicability Post-graduate/MBA. Case overview Case A: Mr Grandhi Mallikarjuna Rao, founding chairman of GMR, was considering a proposal to bid for an upcoming international airport in Hyderabad, India. The strategic move would have marked GMR’s foray into the Indian airport infrastructure sector. GMR had been involved in the development and operation of power plants and had thrived on public–private partnerships for all its projects. Mr Rao is thinking: Should GMR make another major investment in infrastructure development by bidding to build the airport in Hyderabad, India? Further, how should the organization prepare itself for this strategic move? Case B: On April 4, 2013, the meeting of GMR’s Group Executive Council (GEC) was scheduled to take place. Srinivivas Bommidala, G.M. Rao’s son-in-law and Chairman of GMR’s airports business, was gearing up for the meeting. The meeting was called to discuss a proposal for bidding for an upcoming airport project in the Philippines. It had been more than a decade since GMR entered the airport infrastructure sector. The organization had built substantial airport operating expertise during that period. It adopted a joint venture (JV) model for expanding in the airport infrastructure business. Until now, the organization had always formed JVs for all its airport projects. JVs with existing airport operators were necessitated by the bid conditions that required a certain minimum airport operating experience for qualifying as a bidder for various projects. In some cases, a JV with a local player helped GMR with market knowledge for functioning in a foreign market. GMR also used JVs to access the capabilities it lacked for operating in this sector and gradually learnt from its partners for building capabilities in-house. The group now had the required operating expertise in the sector to qualify as a bidder. One of the key issues the GEC was contemplating was: Whether GMR should continue to form JV for bidding for the upcoming project or should it go solo? Further, if it had to form a JV then, in which areas should it seek a partner? Expected learning outcomes Case A: To understand the relationship between key concepts in strategic management, including diversification, capabilities and core competence. To help students understand the various factors managers consider when deciding on the diversification strategy of an organization. To create an understanding of the organizational processes required to facilitate diversification into a new segment. To teach students how to evaluate a potential market opportunity that may require a firm to take on a diversification strategy. Case B: To help students understand how companies use alliances as growth strategies. To understand the rationale for formation of various alliances. To explore various factors managers consider when deciding on alliance strategy of an organization. To understand the challenges associated with using alliances as a strategic option. To understand the pros and cons of internal development (i.e. going solo) vis-à-vis strategic alliances. Subject code CSS 11: Strategy.

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