Syllabus

Title
1780 ExInt III: Elective - Managing and Financing Project Investments in High Risk Countries
Instructors
Assoz.Prof. PD Dr. Jakob Müllner, Dr. Christoph Riedler, MSc (WU)
Contact details
Type
PI
Weekly hours
2
Language of instruction
Englisch
Registration
09/23/22 to 09/30/22
Registration via LPIS
Notes to the course
Dates
Day Date Time Room
Friday 10/07/22 01:30 PM - 05:00 PM Online-Einheit
Friday 10/14/22 01:30 PM - 05:00 PM Online-Einheit
Friday 10/21/22 01:30 PM - 05:00 PM Online-Einheit
Friday 10/28/22 01:30 PM - 05:00 PM Online-Einheit
Friday 11/04/22 09:00 AM - 01:00 PM Online-Einheit
Friday 11/11/22 09:00 AM - 01:00 PM Online-Einheit
Friday 11/25/22 01:30 PM - 03:30 PM Online-Einheit
Contents

The global market for infrastructure finance is one of the biggest markets in the world with exponential growth rates. The G 20 estimate global demand for infrastructure finance until 2038 at 94 trillion USD, the majority of which will be invested in emerging economies with, sometimes, high risks and weak institutional structures.

The course addresses the challenges emerging in large-scale infrastructure investments in high risk countries. The complexity of megaprojects like the Hamaca oil field (Venezuela), the Chad-Cameroon pipeline or the construction of Hong-Kong Disney Land results in managerial and financial problems that are more pronounced than in traditional corporate investment. Projects are exposed to extensive political, financial and commercial risks. For foreign investors, risk management becomes a key consideration.

In the course, possible strategies for diversifying, transferring and mitigating risk are discussed based on case studies and empirical academic studies. Such strategies include financial strategies (project finance), contractual strategies (hedging, insurance, guarantees and non-financial contracts) as well as classical strategic and managerial considerations (alliances, co-investment, joint-ventures, management fallacies in megaprojects).

Furthermore, an ex-consultant from a big four accounting firm will discuss the planning and structuring process of international infrastructure investments using a financial model based on a high risk infrastructure investment. The case study of a public transport project in Africa illustrates the use of different risk strategies and their effect on the integrated financial model.

Learning outcomes

During the course, students

  • Have acquired theoretical and conceptual knowledge on the nature and particularities of large scale- infrastructure investments.
  • Become acquainted with the market for infrastructure projects, in particular in developing countries.
  • Have a systematic understanding of risk management techniques in large megaprojects.
  • Are able to analyze and implement a variety of interdisciplinary risk management strategies in international infrastructure investment.
  • Become acquainted with a number of successful and unsuccessful cases of infrastructure projects.
  • Will understand the background of financial modeling in project finance and will learn how to work with a simple integrated financial model using Excel.
Attendance requirements

The elective is a distance learning course that can be concluded entirely from a distance. Coachings will be offered online by the instructor.

Students watch weekly lecture casts on theory and submit week-to-week take-home assignments. In the meantime students work on group projects. This final exam session and the initial course welcome sessions are the only sessions that requires online presence at a predetermined time.

Teaching/learning method(s)
  • The course is designed as an online, modular course that is taught entirely online on learn@wu. Students are expected to complete ALL weekly online learning components:

  • Pre-session mandatory readers
  • Recorded lecture casts (asynchronous)
  • Synchronous teaching sessions
  • Online assignments and learning extensions (videos & podcasts)
  • Final Exam
  • Group work
  • The course finishes with a written online exam (further info below). The distance course is supported online through student forums.

    Students should have access to EXCEL on their work computers. Teaching Language is English.

Assessment
  • Grade composition:

    20% Take-home assignments

    30% Group projects

    50% Multiple choice exam

    5% Bonus Points on Financial Modeling
     

    Group project:

    Students watch the movie “Big Men”. In groups, they write an open essay in which they reflect about the case of the Jubilee Field. Students should connect the case of the movie to the theories, topics, examples and literature of the course.

    The essay should not exceed 2000 words.

    Grading criteria for the group project:

    • 50 % Connections between movie and theories, topics, examples and literature
    • 25 % Terminology & Writing
    • 25 % Presentation & Formatting, Citation
Prerequisites for participation and waiting lists

Please contact masterexint@wu.ac.at for inquiries. The course is open for all international and WU students.

Recommended previous knowledge and skills

The course has no pre-requisites.

Availability of lecturer(s)

Dr. Jakob Müllner
Associate Professor

WU Vienna - Wirtschaftsuniversität Wien
Institute for Export Management
Department of Global Business and Trade
Welthandelsplatz 1 / D1.5 OG, A-1020 Wien
Tel.: +43-1-313 36-4374
Fax: +43-1-313 36-90-4374
jakob.muellner@wu.ac.at
 

Digital open office hours upon prior appointment

Unit details
Unit Date Contents
1 07.10.2022 online synchronous

Session 1: Introduction
Instructor: Jakob Müllner

Agenda:

  • Course Admin
  • Group projects Instructions
  • Introduction to modelling infrastructure projects

Take-home readers:

Müllner (2016) - From uncertainty to risk — A risk management framework for market entry; Journal of World Business, 51(5): 800-14.

Esty, B., Chavich, C., & Sesia, A. 2014. An Overview of Project Finance and Infrastructure Finance— 2014 Update, Working Paper. Boston: Harvard Business School.

Esty, B.C. 1999. Improved Techniques For Valuing Large-Scale Projects. Journal of Project Finance. 5(1) 17-26.

 

2 14.10.2022 online asynchrnonous

Session 2: Project Finance and Risk Management 
Instructor: Jakob Müllner

Lecture Casts Modules 1&2:

  • Introduction to Infrastructure Finance
  • Introduction to Project Finance
  • Why study large infrastructure projects

 

  • Project finance in theory
  • Risk management theory
  • Risks in infrastructure finance
  • Risk management framework for infrastructure finance

Asynchronous online session is supported by an online open office. Students can log into the open office to clarify any questions. The open office is held on 14.10.2022 from 17:00 to 18:00.

Take-home assignment:

Complete multiple choice test on Modules 1-2

Lecture Casts can be viewed at any time:

  • Introduction to Infrastructure Finance
  • Introduction to Project Finance
  • Why study large infrastructure projects
  • Project finance in theory
  • Risk management theory
  • Risks in infrastructure finance
  • Risk management framework for infrastructure finance

Take-home assignment:

Read the case Busang: River of Gold. Reflect on the infrastructure project, the players involved and how it relates to the course.

 

3 21.10.2022 online asynchronous

Instructor: Jakob Müllner

Lecture Casts Modules 2 -5:

  • Capital Structure as a risk management tool in project finance
  • Capital structure theory

 

  • Legal contracts as a risk management tool in project finance
  • Types of contracts in project finance
  • Boundary conditions of contractual risk management

 

  • Socio-economic risk management strategies and challenges in project finance
  • Socio economic risk management strategies in project finance
  • Managerial challenges in large scale projects
  • Debt-side
  • Equity-side

Take-home assignment:

Complete multiple choice test on Modules 2-5

Asynchronous online session is supported by an online open office. Students can log into the open office to clarify any questions. The open office is held on 21.10.2022 from 16:00 to 17:00.

4 28.10.2022 online synchronous

Session 4: Financial Modeling I
Instructor: Christoph Riedler

  • Background of financial modelling
  • Structuring and modelling process
  • The role of the advisor
  • Case study

Take-home assignment:

Watch the movie Big Men (group assignment)

5 04.11.2022 online synchronous

Session 5: Wrap-up Modules 1-5
Instructor: Jakob Müllner

  • Wrap-up
  • Case discussion
  • Exam Discussion
6 11.11.2022 online synchronous

Session 6: Financial Modeling II
Instructor: Christoph Riedler

     •  How to work with an financial model
     •  How to interpret KPIs
     •  Tips and tricks using financial models

Take-home assignments:

Tasks using the model (Bonus points)
Complete a multiple choice test on financial modeling.

 
7 25.11.2022 online synchronous

Session 7: Online exam
The online exam is held on learn@wu. It includes multiple choice and open questions.

Last edited: 2022-09-20



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