Questions and Answers of Corporate Finance Principles And Practice

How important are the commercial banks in Project Finance globally?In what way does their participation differ when lending to industrialized countries and developing countries?
What are the factors that discourage commercial bank lending to lower and middle-income developing countries?
What institutions make up the World Bank Group? What role does each of these play in the offer of Project Finance services?
What is the difference between export credit agencies and investment promotion agencies?
List three types of institutions involved with creation of infrastructure investment funds?
How would your financing plan differ if you were asked to fund the same project in three different countries: (a) an industrialized country;(b) higher income developing country; and (c) middle-income
In which countries would you be likely to get the longest financing terms? What effect would this have on the tariffs that could be offered?
Define project agreements. Collectively, what role do they play in Project Financing?
Explain the term finance-ability of the project agreements.
What are the three broad categories of project agreements?
What is the overarching general risk-sharing principle under the project agreements?
Compare and contrast between a concession and an off-take agreement.
Identify the credit risk assumed by each of the following project participants:(a) Shareholders.(b) Project vehicle.
Identify two major construction risks.
Explain the lenders' preferences for:(a) An off-take agreement structured around the take-or-pay provision.(b) A turnkey EPC contract.
In what ways are the off-take agreement and EPC contract linked?
When is an RSA not needed?
What are the four ways an O&M agreement is structured?
What special role do LDs play in project agreements?
Distinguish between Project Finance and other forms of Corporate Finance. Discuss the unique characteristics of the former relative to more traditional lending.
What advantages and disadvantages are there in the application of Project Finance to small or large projects?
What does the term with full recourse mean? Limited recourse?
Which of the following projects are not likely to involve Project Finance: (a) supermarket; (b) defence installation; (c) automobile manufacturer; (d) downstream extension of an existing plant; and
Identify the major project participants found in Project Finance deals.
Explain the major types of risks that are usually allocated among the various project participants. What principle is used in allocating such risks?
Distinguish between Build-Operate-Transfer (BOT) and Build-Own Operate (BOO) methods of private participation in the provision of infrastructure (see Appendix 1. 1). From the perspective of
You are an advisor to the Privatization Commission (PC) of country X and you are responsible for the unbundling and restructuring of the telephony sector. The Commission consists of seven members all
What are the three types of structured finance, and what are the differences between them?
What concepts do CADS and FCF represent, and how do these differ?
Compare and contrast the type of due diligence needed for an IRB vs. an oil/gas financing.
What is the trustee borrowing structure used for?
What is the difference between an efficient and an inefficient tax payer in an owner-lease Project Finance?
What is a double whammy lease?
Discuss the historical evolution of the corporate finance movement. What is significant about it for Project Finance? Acquisition Finance? Structured Finance?
When and how did derivatives come into being?
Discuss the differences between a debt hybrid and a derivative.
What are debt hybrids used for? Give one or two examples of a debt hybrid.
Describe the concepts of open access, ~ooling and timetabling. What do they apply to? What do they have to do with Project Finance?
What was the first network industry that was reorganized in the US?
What are the differences between a traditional PPA and an international one?
In what ways is the experience related to the reorganization of network industries different in the UK, compared to the US?
Which industry (ie non-finance) sectors would you currently associate with green finance?
Why might financial decision-making not take environmental goals into account?
Who are the key stakeholders for your organization? Be as specific as possible.
Which of the SDGs are most relevant, in your view, for the finance sector?
What might be the key barriers to green finance becoming more widespread?
Reflecting on the visible effects of climate change outlined above, in what ways do you think the finance sector may have directly or indirectly contributed to them?
Thinking about the organization you work for, or an organization you are familiar with, what (if anything) has it done/is it doing to reduce its direct or indirect emissions of green house gases?
What might be the impact of these observed and projected future changes on the city/country/region where you live and work?
How might the community you live in, or a community you are familiar with, need to adapt to climate change?
What active steps could you take, as an individual, to mitigate the impact of climate change? What active steps could the organization you work for, or another organization you are familiar with,
How might a climate-driven natural disaster impact on your organization? Think about the full range of stakeholders.
What might be some of the physical, transition and liability risks for the finance sector?
How much of your pension and other investments are invested in fossil fuels and other high-carbon assets? Do you know? Is it easy to find out?
What might be the challenges for Fairphone’s business model?
Of the two scenarios presented in this section, which would you prefer to live and work in: 1. Fast forward, or 2. Slow motion? Why?
How might governments around the world collaborate to support green and sustainable finance?
What national policies could governments introduce to support green and sustainable finance?
What should industry bodies do to support green and sustainable finance? What examples can you identify from your country?
What principles are you aware of that you would associate with green and sustainable finance?
Have you come across examples of greenwashing in the products and services you consume, or have read about? How did/does this make you feel?
Can you think of other examples of organizations with genuine deep green strategies?
How could you use your learning from this course to train and encourage colleagues?
What, in your view, is required to ensure that finance flows are consistent with the Paris Agreement targets?
In what ways (if any) are green and sustainable investments and activities monitored and reported in your organization, or in an organization with which you are familiar?
Why, in your view, is independent external review of impacts and outcomes so important?
What, in your view, might be some of the challenges of monitoring and measuring broader sustainability impacts beyond environmental performance?
What, in your view, are the advantages of the increasing availability and quality of environmental performance and climate data?
What might be some of the key climate-related and environmental risks faced by businesses?
What environmental risks is your organization (or an organization you know well) most exposed to?
Which physical risks are highest for your organization? What strategies could you put in place to minimize and/or mitigate these risks?
How vulnerable are some products and services you use to substitution by low-carbon alternatives? What would cause you to switch?
Which of these factors are most significant in terms of your organization’s climate risks, or an organization with which you are familiar?
How might retail and commercial banks be negatively affected by climate change? And what might the opportunities be for green and sustainable banking?
Has your organization, or organizations you are familiar with, signed the Principles for Responsible Banking? How might you encourage them to do so if they have not yet endorsed the Principles?
How might the different corporate forms outlined above affect how a bank sees its role in relation to the environment?
How might corporate and investment banks support the transition towards a more sustainable economy?
Why might a company choose to raise finance for new green projects by issuing bonds, rather than other sources of capital?
Why might a government prioritize the development of green bond markets?
What are the costs and benefits of having more stringent standards and requirements on use of proceeds and disclosure in order to secure green bond labelling or certification?
Would the things being financed by green use-of-proceeds bonds have been successfully financed anyway and, if so, does it matter?
Why might China be keen to encourage the growth of its green bond market?
In what ways do you think the activities of central banks could affect the natural environment?
In what ways do you think development banks have supported the growth of green finance?
What might be the business advantages of developing bespoke green loan products?
Why might the requirements and needs of investors prioritizing green and sustainable finance be different from those of any other investor?
What are the drawbacks of relying on green equity indices?
How can the distinctive characteristics of private equity investment be mobilized in support of green finance?
What might be the tensions between making green and sustainable funds greener and making those funds more accessible or attractive to large asset owners like pension funds?
What might be the advantages and/or disadvantages of ETFs for green and sustainable finance?
How might the insurance industry be affected by climate change and other forms of environmental damage? What risks and opportunities are there for the insurance industry?
How might insurance firms help to protect people from the increasing number of climate-related disasters?
What might be considered as green insurance?
Can you think of any insurance products or services that might fit with our definition of green insurance?
Can you think of any emerging trends that may open up more opportunities for motor insurers to promote environmental sustainability
With renewable energy set to grow further in the coming years, what more could insurance firms do to encourage take up?
How else might finance help to encourage energy efficiency?
What opportunities might FinTech offer for green finance?
What initiatives can you identify in markets with which you are familiar that seek to apply FinTech tools and techniques to green and sustainable corporate banking and capital markets activities?
What data does your organization, or an organization with which you are familiar, provide that might help investors and analysts assess sustainability

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