It will introduce an analytical framework drawing on applied institutional economics that includes and concentrates primarily on an analysis of the institutional logic behind generic project finance arrangements.
The application of the institutional framework will be demonstrated with project cases from Hong Kong, Thailand, India, Europe and Azerbaijan – each at different stages of development. While each project case will have a general theme and will highlight aspects of interest to built environment professionals, it will primarily be used to illustrate one or more specific PF/PFI principle.
About the authors.
1 The Nature of Project Finance .
1.1 The world of projects today.
1.2 Corporations, finance and projects; important concepts.
1.3 The project company business model.
1.4 The project cycle.
1.5 System concepts and the project company.
1.6 Plan of the book.
2 Complex Transactions .
2.1 Transactions, the cost of transaction, transaction cost economics, and projects.
2.2 A more formal approach to disaggregation of transactions.
2.3 The influence of agency on transaction costs – agency costs.
2.4 Corporate finance context.
2.5 Incentive conflicts in corporate finance.
2.6 Transaction costs and agency – theoretic logic of the project finance model.
Appendix 2.1 Comparison of long-term debt instruments.
A2.1.1 Syndicated loans.
A2.1.2 International bonds.
3 Financial Evaluation .
3.1 Valuation and the project company.
3.2 Valuation and the project company as a single-asset business.
3.3 Capital budgeting decisions.
4 Managing Risk in Project Finance Transactions .
4.1 The project cycle revisited.
4.2 Risk management approaches.
4.3 The project company and risk identification.
4.4 Risks in the construction phase.
4.5 The institutional environment and risk.
4.6 Risk management and project lenders.
5 Continuing Evolution: from PF to PFI, PPP and beyond .
5.2 PFI origins.
5.3 Types of PFI.
5.4 PFI features.
5.5 Procurement process principles.
5.6 Contract and control structure.
5.7 The special purpose or project vehicle and financing.
5.8 PFI/PPP and rational privatisation.
5.9 Risk management.
5.10 Financial risk in PFI and PPPs.
5.11 Challenges for PFI and PP and the responses.
5.12 The lessons.
6 The Relevance of Sound Demand in Infrastructure Project Finance –.
The Sydney Cross-City Tunnel .
6.1 Infrastructure finance: the Sydney cross-city tunnel.
6.2 History of the CCT project.
6.3 Cheung Kong Infrastructure Holdings Limited.
6.4 The bidding process.
6.5 Valuing the project.
6.6 Assessing project risks.
6.7 Capital structure.
6.8 Completion of the deal.
6.9 Project outcomes.
7 Financial Structure and Infrastructure Project Finance – The Hong Kong Western Harbour Crossing .
7.1 Refinancing the western harbour crossing, Hong Kong.
7.2 History of the western harbour crossing.
7.3 Valuation of the project.
8 Institutional Risks and Infrastructure Project Finance – The Dabhol Power Project .
8.1 Dabhol power project.
8.2 Development of the Dabhol power project.
8.3 Power purchase agreement.
9 Extreme Complexity in Transacting – Public Private Partnerships at Work in the London Underground .
9.1 Public private partnerships: London Underground.
9.2 Two countries two systems.
9.3 Public private partnership.