Customer Reviews

Financing Large Projects: Using Project Finance Techniques and Practices

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Financing Large Projects: Using Project Finance Techniques and Practices by Fouzul Khan, Robert Parra is a very useful primer for project finance practitioners.

This book focuses on the financing of large projects that rely on project finance techniques and practices in order to raise debt. Being in infrastructure financing industry over four (4) years, I faced a tremendous dearth of a good book covering infrastructure financing intricacies. The book has offered knowledge of my much needed felt areas.

The book integrates every essential aspects of issues relating to the financing of large projects, namely, financing, law, engineering, environmental, etc. It also has a detailed description on history of project finance along with origin and development of various instruments.

What a user shall find noteworthy about the book is that it covers different phases of project development, and attributes thereof. Starting from the project conception, the book goes on explaining project negotiation, appraisal, creation and perfection of security over project assets.

The first half of the book describes project origination and early development activities, negotiations with ceding authority and others of project agreements, sources of international finance and credit enhancements, and the sponsor's support required for classic and non-classic deals. The second half discusses the architecture of the typical financial model, due diligence and appraisal process conducted by lenders, scope and content of negotiations related to each of several finance documents, role of derivatives and hedges, and typical issues encountered in structuring a security package.

Finally, the book also appends a very useful project feasibility financial model, which could be customized for use in feasibility analysis of similar projects.

The book is a reasonable introduction to project financing but falls short on many of the pratical details used in balancing risks, which is the essence of project financing.

I was keen to see how the book covered the financing of port projects and I found that the authors summarised a 1998 publication By Drewry shipping without adding any new insights. Indeed the 1998 publication provides more pratical benchmarks and financing options.