Financing and Investing in Infrastructure from Coursera

Learn how debt and equity can be used to finance infrastructure investments and how investors approach infrastructure investments!

According to the OECD, the global infrastructure investment requirement by 2030 for transport, electricity generation, transmission & distribution, and water & telecommunications totals to 71 trillion dollars. This figure represents about 3.5% of the annual World GDP from 2007 to 2030.

The European Commission estimated, that by 2020, Europe will need between 1.5 - 2 trillion Euros in infrastructure investments. Between 2011 and 2020, about 500 billion Euros will be required for the implementation of the Trans-European Transport Network (TEN-T) program, 400 billion Euros for Energy distribution networks and smart grids, 200 billion Euros on Energy transmission networks and storage, and 500 billion Euros for the upgrade and construction of new power plants. An additional 38 - 58 billion Euros and 181 - 268 billion Euros in capital investment will be needed to achieve the targets set by the European Commission for broadband diffusion.

Traditionally investments in infrastructure were financed using public sources. However, severe budget constraints and inefficient management of infrastructure by public entities have led to an increased involvement of private investors in the business.

The course focuses on how private investors approach infrastructure projects from the standpoint of equity, debt, and hybrid instruments.

The course concentrates on the practical aspects of project finance: the most frequently used financial techniques for infrastructure investments. The repeated use of real life examples and case studies will allow students to link the theoretical background to actual business practices.

In the end of the course, students will be capable of analyzing a complex transaction, identifying the key elements of a deal, and suggesting proper solutions for deal structuring from a financial advisor's perspective.

Course Format

The course will consist of lecture videos, readings, and talks given by guest speakers. Although we do hope you will attend the entire course, it is possible to just focus on single topics.

Syllabus

Project Finance and the Network of Contracts

Module 1 explores the nature of project finance as a nexus of contracts. We will analyze the nature of the SPV (Special Purpose Vehicle) as an empty shell and the key contracts surrounding it (project contracts and financial contracts).

Syndicate

Module 2 analyzes the relationship between the SPV and its lenders. We will start from the introduction of what a syndicate is looking at the different roles performed by banks in a syndicate and the options available to organize such a syndicate. We will also look at the cost paid by the SPV for the organization of the financing and reflect on how the recent financial crisis has reshaped the syndicated loans market.

Risk Analysis

Module 3 introduces the topic of risk in infrastructure financing. We will introduce a possible risk taxonomy (pre-, post-, and both pre- and post-completion risks) useful for analyzing risk as a preliminary step for its allocation to the parties best able to manage and control risk. Our final learning outcome will be the preparation of a risk matrix for an infrastructure project.

Capital Budgeting

Module 4 introduces capital budgeting of infrastructure deals. Firstly, we will present the key elements making up the budget of the construction phase and the sources of finance used for the construction of said infrastructure. We will then move on with the analysis of the budgeting of the operational phase pointing our attention to the sources and uses of funds. Special care will be given to the analysis of the system of reserve accounts of the SPV.

The Financial Sustainability of an Infrastructure Project

Module 5 covers whether an infrastructure project is doable or not from the dual perspective of the shareholders and lenders. We will answer this question in the module by analyzing the criteria for measuring the profitability for project sponsors and lenders. We will also look at measurements of financial sustainability and the key role played by cover ratios in disciplining the performance of the SPV.

How Can Creditors Protect Themselves?

Module 6 looks at a number of subjects that share the need for creditors to protect themselves against pathological situations of the infrastructure. We will analyze the standard security package offered by the SPV to its creditors, together with an in-depth look at the system of covenants assisting the credit agreement. We will then look at the methods used to amortize a base facility in project finance.

Additional Videos and Final Quiz

Here you can find the lectures on the business cases and the final quiz

Good to know

Know what's good

, what to watch for

, and possible dealbreakers

Develops financial skills in underwriting and due diligence of infrastructure projects, which are hard to attain in industry at the entry level

Covers debt and equity in depth, which is beneficial for financial advisors in their career trajectory

Taught by an expert with several decades of applicable banking experience

Provides foundational knowledge of project finance for advanced undergraduate and graduate students or practicing engineers and economists

Presents project financing techniques in an organized manner, utilizing examples to aid in application

Course structure enables flexibility for students to focus on specific topics or engage with the entire course

Reviews summary

Infrastructure financing

learners say this largely positive course on "Financing and Investing in Infrastructure" is engaging and well received. The highly recommended course provides a clear, well-structured, practical, useful, and comprehensive overview of the fundamentals of project finance, especially for those in or interested in the infrastructure sector.

The course is suitable even for beginners or those with limited finance knowledge.

"Great course for anyone interested in infrastructure financing and investment! It is easy to follow even with a limited background in finance, and very well organized."

"As Engineer with limited knowledge of Finance, I think this Course is suitable for all people interested in Infrastructure Finance."

"This course is a very detailed course regarding project finance. It gives a full overview regarding project finance and how it has evolved."

The course is well-structured with a good balance of theory and practical case studies.

"This course provides in depth overview of Project Financing with numerous case studies."

"The course has a very interesting sequence from terminology to generation of practical and useful examples, to start an application base of this tool."

"The classes are very well structured, the teacher really knows what he is talking about and the examples are clear."

The course content is relevant to the real world and applicable to major infrastructure projects.

"A very relevant course today with the rise of P3 and the challenges to financing public infrastructure."

"This course helps the beginners in project finance world to build a strong foundation to understand a more complex situation"

"This ranks amongst one of the best courses available in Infrastructure Finance and kudos to Prof. Gatti for explaining concepts with numericals and real life examples."

This course is engaging with clear, well-organized lessons and helpful downloadable materials.

"Great course with a fairly broad overview of PF and its main concepts."

"The explanation is straight to the point, making the complex simple and easy to digest, adding insight, provoking curiosity, and increasing the mindset in the Infrastructure Investment Project Finance and Investment."

"The course is very well structured. It is very relevant to what I see in the construction industry, particularly in infrastructure projects."

Learners gain practical knowledge and real-life examples.

"This course allowed me to deepen my knowledge in the field of infrastructure financing."

"Very practical course, the content, assignments and case studies are of top quality and based on real time projects."

"It combines the theory and the practice of Project Finance in a very thorough way."

Professor Gatti is knowledgeable, clear, concise, and engaging.

"Great course, the lessons are structured and the concepts are very well explained."

"The course is very well planned and structured in a way to understand easily."

"Excellent course! It really brings a lot of knowledge in a single and very structure umbrella."

Learners report mixed experiences with the difficulty of the quizzes and tests.

"The way in which quizes are graded is confusing to say the least..."

"The lecture if very useful to organize the topics of project finance for the ones who work daily with it."

"For me that work in the brazilian development bank it also helped to undertand better how it works in other markets."

Some learners found the course content to be outdated.

"Very good, clear and pragmatic. Only minor comment relates to the fact that it is a little bit dated."

"Would be 5 stars if it was updated for 2023, excellent nonetheless."

Activities

Be better prepared before your course. Deepen your understanding during and after it. Supplement your coursework and achieve mastery of the topics covered in Financing and Investing in Infrastructure with these activities:

Organize and Review Course Notes

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Enhance your retention of course material by organizing and reviewing your notes.

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Organize your notes into a coherent structure
Review your notes regularly

Compile a Glossary of Key Terms in Infrastructure Finance

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Improve your understanding of the terminology used in infrastructure finance by creating your glossary.

Browse courses on Project Finance

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Identify key terms from course materials and industry resources
Research the definitions and meanings of the terms
Organize the terms into a glossary

Network with Professionals in Infrastructure Investment

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Expand your knowledge and network by connecting with professionals working in infrastructure investment.

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Attend industry conferences and events
Join professional organizations related to infrastructure finance

Four other activities

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Follow Online Courses on Infrastructure Finance

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Supplement your learning by exploring online courses and tutorials that cover specific aspects of infrastructure finance.

Browse courses on Project Finance

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Search for reputable online courses and tutorials
Enroll in a course that aligns with your interests and learning goals
Complete the course and apply what you've learned to your studies

Practice Applying Concepts to Real Projects

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Reinforce your understanding of project finance by working on real-world examples to see how the concepts are applied in practice.

Browse courses on Project Finance

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Identify a suitable project to work on
Analyze the project's financial viability
Develop a financial model for the project
Present your findings to a group of peers or industry professionals

Mentor Junior Students or Colleagues in Infrastructure Finance

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Reinforce your understanding of project finance by mentoring junior students or colleagues and guiding them through the learning process.

Browse courses on Project Finance

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Identify opportunities to mentor others
Share your knowledge and experience with mentees
Provide guidance and support to help mentees develop their skills

Write a Case Study on an Infrastructure Project

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Deepen your understanding of project finance by researching and writing a case study on an actual infrastructure project.

Browse courses on Case study

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Analyze the project's strengths and weaknesses
Choose a project to write about
Research the project's history, financing, and performance
Write a report summarizing your findings

Career center

Learners who complete Financing and Investing in Infrastructure will develop knowledge and skills that may be useful to these careers:

Financial Analyst

Financial Analysts use their knowledge of finance, economics, and accounting to analyze and interpret financial data to make investment recommendations. They also assess and make recommendations on the value and risks associated with various investments. This course helps build a foundation in these important concepts, with a focus on infrastructure finance.

See salaries and explore the career path for Financial Analyst

Investment Analyst

Investment Analysts assess and make recommendations on the value and risks associated with various investments. Knowledge of debt, equity, and infrastructure finance is vital to making informed decisions on which investments to recommend to clients. This course helps build a foundation in these important concepts.

See salaries and explore the career path for Investment Analyst

Project Manager

Project Managers plan, execute, and close projects. They are responsible for ensuring that projects are completed on time, within budget, and to the required quality standards. Infrastructure projects are often complex and require a high level of financial expertise. This course can help you develop the skills and knowledge you need to succeed as a Project Manager in this field.

See salaries and explore the career path for Project Manager

Consultant

Consultants provide advice to businesses and organizations on a variety of topics, including finance, strategy, and operations. Infrastructure finance is a specialized field that requires knowledge of debt, equity, and project finance. This course can help you develop the skills and knowledge you need to succeed as a consultant in this field.

See salaries and explore the career path for Consultant

Real Estate Developer

Real Estate Developers acquire, develop, and manage real estate properties. They are responsible for the financial planning and execution of real estate projects. Infrastructure finance is a key component of real estate development, as it is often used to finance the acquisition, development, and construction of real estate projects. This course can help you develop the skills and knowledge you need to succeed as a Real Estate Developer.

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Private Equity Investor

Private Equity Investors invest in companies that are not publicly traded. They often provide financing to companies that are in the early stages of development or that are looking to expand their operations. Infrastructure finance is a specialized field that requires knowledge of debt, equity, and project finance. This course can help you develop the skills and knowledge you need to succeed as a Private Equity Investor in this field.

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Venture Capitalist

Venture Capitalists invest in early-stage companies that have the potential to grow rapidly. They often provide financing to companies that are developing new technologies or products. Infrastructure finance is a specialized field that requires knowledge of debt, equity, and project finance. This course can help you develop the skills and knowledge you need to succeed as a Venture Capitalist in this field.

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Investment Banker

Investment Bankers provide financial advice to corporations, governments, and other organizations. They help clients raise capital, merge with other companies, and acquire new businesses. Infrastructure finance is a specialized field that requires knowledge of debt, equity, and project finance. This course can help you develop the skills and knowledge you need to succeed as an Investment Banker in this field.

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Public Finance Analyst

Public Finance Analysts provide financial advice to governments and other public sector entities. They help clients raise capital, manage their debt, and develop and implement fiscal policies. Infrastructure finance is a key component of public finance, as it is often used to finance the development and operation of public infrastructure projects. This course can help you develop the skills and knowledge you need to succeed as a Public Finance Analyst.

See salaries and explore the career path for Public Finance Analyst

Infrastructure Investor

Infrastructure Investors invest in infrastructure projects, such as roads, bridges, and airports. They often provide financing to governments and private companies that are developing and operating infrastructure projects. This course can help you develop the skills and knowledge you need to succeed as an Infrastructure Investor.

See salaries and explore the career path for Infrastructure Investor

Sustainability Analyst

Sustainability Analysts assess and report on the environmental and social impact of investments. They help investors make informed decisions about which investments to make and how to manage their portfolios. Infrastructure projects can have a significant environmental and social impact, so it is important for Sustainability Analysts to have a strong understanding of infrastructure finance. This course can help you develop the skills and knowledge you need to succeed as a Sustainability Analyst.

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Corporate Treasurer

Corporate Treasurers are responsible for managing the financial resources of a company. They oversee the company's cash flow, investments, and debt. Infrastructure finance is a key component of corporate finance, as it is often used to finance the acquisition, development, and construction of capital projects. This course can help you develop the skills and knowledge you need to succeed as a Corporate Treasurer.

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Commercial Lender

Commercial Lenders provide loans to businesses. They assess the creditworthiness of borrowers and determine the terms of the loan. Infrastructure finance is a specialized field that requires knowledge of debt, equity, and project finance. This course may be useful for Commercial Lenders who want to learn more about infrastructure finance and how it can be used to help their clients finance their projects.

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Financial Planner

Financial Planners help individuals and families plan for their financial future. They provide advice on a variety of topics, including retirement planning, investing, and estate planning. Infrastructure finance is a specialized field that requires knowledge of debt, equity, and project finance. This course may be useful for Financial Planners who want to learn more about infrastructure finance and how it can be used to help their clients achieve their financial goals.

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Credit Analyst

Credit Analysts assess the creditworthiness of borrowers. They analyze financial data and make recommendations on whether or not to lend money to a particular borrower. Infrastructure finance is a specialized field that requires knowledge of debt, equity, and project finance. This course may be useful for Credit Analysts who want to learn more about infrastructure finance and how it can be used to help them make informed lending decisions.

See salaries and explore the career path for Credit Analyst