Syllabus

Title
1577 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
09/21/23 to 09/29/23
Registration via LPIS
Notes to the course
Dates
Day Date Time Room
Friday 10/06/23 02:00 PM - 04:00 PM Online-Einheit
Friday 10/13/23 02:00 PM - 04:00 PM Online-Einheit
Friday 10/20/23 02:00 PM - 04:00 PM D1.1.078
Monday 10/23/23 04:00 PM - 07:00 PM TC.3.03
Friday 11/03/23 02:00 PM - 04:00 PM TC.3.03
Friday 11/10/23 02:30 PM - 05:30 PM D1.1.078
Friday 11/17/23 02:00 PM - 05:00 PM Online-Einheit
Friday 12/01/23 02:00 PM - 06:00 PM TC.4.27
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 assignment

    30% Group projects

    50% Multiple choice exam

    5% Bonus Points on Financial Modeling
     

    Group project:

    Students conduct a financial, ecological and social assessment of the case project and present it to Doppelmayr in the final session. Groups should cover the following elements in their analysis and presentation

  • Country risk analysis
  • Project-Risk analysis
  • Project valuation and sensitivity analysis
  • Proposed financing strategy

Take home assignment:

  • 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.
    • 50 % Connections between movie and theories, topics, examples and literature
    • 25 % Terminology & Writing
    • 25 % Presentation & Formatting, Citation
  • The essay should not exceed 2000 words.

    Grading criteria for the group project:

Prerequisites for participation and waiting lists

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

Readings

Please log in with your WU account to use all functionalities of read!t. For off-campus access to our licensed electronic resources, remember to activate your VPN connection connection. In case you encounter any technical problems or have questions regarding read!t, please feel free to contact the library at readinglists@wu.ac.at.

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 06.10.2023 online synchronous

Session 1: Introduction
14:00-16:00
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 13.10.2023 online synchrnonous

Session 2: Project Finance and Risk Management
14:00-16:00
Instructor: online Corp. Partner & Case Present. (Doppelmayr & Jakob Müllner)

 

  • 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

 

3 20.10.2023

Session 3
14:00-16:00
Instructor: Jakob Müllner



 

  • 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
4 27.10.2023

Session 4: Financial Modeling I
14:00-16:00
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 03.11.2023

Session 5: Wrap-up Modules 1-5
14:00-16:00
Instructor: Jakob Müllner

  • Wrap-up
  • Case discussion
  • Exam Discussion
6 10.11.2023

Session 6: Financial Modeling II
14:00-16:00
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 17.11.2023 online synchronous

Session 7: online Coaching
14:00-17:00

Instructor: Christoph Riedler
 

8 01.12.2023

Session 8: Touchdown Presentations
14:00-18:00
Instructors: Jakob Müllner, Christoph Riedler, Corp. Partner Doppelmayr

Last edited: 2023-10-15



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