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.