Oxcess amounts after financing the debt will be paid to Unilus it is estimated that QUESTION ONE The University of Lusaka (Unus) is evaluating the possibility of using project finance to Corettholes that we meet the growing demand for accommodation by its students The stanie stave a 5 soor building w 100 rooms on each floor accommodating 4 Sarita per room Each student will pay about K 70.000 per months but due to seasonality my expected to bem 75%pa The building is estimated to cost Kibition Using Datt Egaty Foto of 20% 20% any financing cost will have interest of about 15% Assume that the project is tax exempt as per un agreement with the Zambian government Untus plans to France the whole equity in the project and identify providers of debt Operational contoure estimated m 50% before considenng return to debt and equity holders The debt providers are expected to operate the hostels unto the debt is paid, then Urhus will take over the management of the Hostels The agreement is that any construction will be completed in the next two years and then operations commence immediately until about 10 years when the debt is fully paid Required: A. Explain briefly THREE benefits and THREE challenges of Unilus using project finance for this project (12 Marks) B. Draw / Wnte up a simple structure for the project and explain the role of FOUR main participants in the project (8 Marks) C. Identify FIVE sources of finance for debt that Unilus can use in financing the Project (5 Marks) (TOTAL: 25 MARKS] Oxcess amounts after financing the debt will be paid to Unilus it is estimated that QUESTION ONE The University of Lusaka (Unus) is evaluating the possibility of using project finance to Corettholes that we meet the growing demand for accommodation by its students The stanie stave a 5 soor building w 100 rooms on each floor accommodating 4 Sarita per room Each student will pay about K 70.000 per months but due to seasonality my expected to bem 75%pa The building is estimated to cost Kibition Using Datt Egaty Foto of 20% 20% any financing cost will have interest of about 15% Assume that the project is tax exempt as per un agreement with the Zambian government Untus plans to France the whole equity in the project and identify providers of debt Operational contoure estimated m 50% before considenng return to debt and equity holders The debt providers are expected to operate the hostels unto the debt is paid, then Urhus will take over the management of the Hostels The agreement is that any construction will be completed in the next two years and then operations commence immediately until about 10 years when the debt is fully paid Required: A. Explain briefly THREE benefits and THREE challenges of Unilus using project finance for this project (12 Marks) B. Draw / Wnte up a simple structure for the project and explain the role of FOUR main participants in the project (8 Marks) C. Identify FIVE sources of finance for debt that Unilus can use in financing the Project (5 Marks) (TOTAL: 25 MARKS]
