Project Management
Project Management Course
IV School of Management Engineering Dept. of Production Systems and Business Economics
Project Management Project Financing
Instructor: Alberto De Marco
Project Management Phase
FEASIBILITY
DESIGN PLANNING
DEVELOPMENT CLOSEOUT
OPERATIONS
Financing&Evaluation Risk Analysis&Attitude
Alberto De Marco
1
Financing
Project Management Course
Project Financing Context
Evaluating and financing as precursor to decision d i i to proceed (feasibility phase) d (f ibili h ) Ongoing evaluation through design and planning phase
Outline
Session Objective & Context Financing projects
Owner O Project Contractor
Financial Evaluation
Time value of money Present value NPV & Discounted cash flow Simple Examples Formulae IRR
Missing factors
Alberto De Marco
2
Financing
Project Management Course
Session Objective & Context
The role of project financing p j g Mechanisms for project financing Measures of project desirability Assumptions behind evaluation mechanisms
Components
Context: Feasibility Phases
Project concept Land Purchase & Sale Review Program evaluation (scope, size, etc.) Constraint survey
Site constraints Cost models Site infrastructural issues Permit requirements
Summary Report (Business case) Decision to proceed Regulatory process (obtain permits, variances, etc) Design Phase
Alberto De Marco
3
Financing
Project Management Course
Outline
Session Objective & Context Project Financing
Owner O Project Contractor
Financial Evaluation
Time value of money Present value NPV & Discounted cash flow Simple Examples Formulae IRR
Missing factors
Financing – Gross cashflows years OWNER investment operation incomes owner cashflow owner cum cashflow 1 2 3 4 5 6 7 8 9 10 ($10,000,000) ($20,000,000) $2,000,000 $4,000,000 $6,000,000 $6,000,000 $0 ($10,000,000) ($20,000,000) $2,000,000 $4,000,000 $6,000,000 $6,000,000 $0 ($10,000,000) ($30,000,000)
IV School of Management Engineering Dept. of Production Systems and Business Economics
Project Management Project Financing
Instructor: Alberto De Marco
Project Management Phase
FEASIBILITY
DESIGN PLANNING
DEVELOPMENT CLOSEOUT
OPERATIONS
Financing&Evaluation Risk Analysis&Attitude
Alberto De Marco
1
Financing
Project Management Course
Project Financing Context
Evaluating and financing as precursor to decision d i i to proceed (feasibility phase) d (f ibili h ) Ongoing evaluation through design and planning phase
Outline
Session Objective & Context Financing projects
Owner O Project Contractor
Financial Evaluation
Time value of money Present value NPV & Discounted cash flow Simple Examples Formulae IRR
Missing factors
Alberto De Marco
2
Financing
Project Management Course
Session Objective & Context
The role of project financing p j g Mechanisms for project financing Measures of project desirability Assumptions behind evaluation mechanisms
Components
Context: Feasibility Phases
Project concept Land Purchase & Sale Review Program evaluation (scope, size, etc.) Constraint survey
Site constraints Cost models Site infrastructural issues Permit requirements
Summary Report (Business case) Decision to proceed Regulatory process (obtain permits, variances, etc) Design Phase
Alberto De Marco
3
Financing
Project Management Course
Outline
Session Objective & Context Project Financing
Owner O Project Contractor
Financial Evaluation
Time value of money Present value NPV & Discounted cash flow Simple Examples Formulae IRR
Missing factors
Financing – Gross cashflows years OWNER investment operation incomes owner cashflow owner cum cashflow 1 2 3 4 5 6 7 8 9 10 ($10,000,000) ($20,000,000) $2,000,000 $4,000,000 $6,000,000 $6,000,000 $0 ($10,000,000) ($20,000,000) $2,000,000 $4,000,000 $6,000,000 $6,000,000 $0 ($10,000,000) ($30,000,000)