With more and more banks entering the domain of financing, and high-profile corporates’ unending quest for risk minimisation, this course is an ideal platform for professionals, says BIBEK BHATTARAI

With the revival in the industrial sector coupled with increasing role of private players and Government in the field of infrastructure building, Project Finance has come up as a good career option. With more and more banks entering into the domain of project finance and high-profile corporate’s unending quest for risk minimisation, this has perhaps provided an ideal platform to sustain relatively high job opportunities in this sector.

From refineries to electric-generating facilities and from hydro-electric projects to pipelines, project finance has galloped to be a perfect finance management technique that is shaping up as a new form of generating employment. The financing experts use funds for large-scale natural resource projects and give innovative analytical decisions. Most interestingly, project financing is consistently emerging as the most preferred alternative to conventional methods of financing infrastructure and other various large-scale projects.

What is project finance

It is a complete risk minimisation process and includes risk identification and analysis, risk allocation and complete risk management. At present, it has taken a concrete form of guaranteeing job amid economic slowdown. With risk being as one of the obstacles for growth and fluctuating revenues for corporate world beside Government pushing up infrastructure for bringing about a complete economic development, project finance seems to be one of the most coveted carrier option. It deals with a particular project, such as railway, pipeline, toll road, power station, mining, hospital or prison which is repaid from the cash-flow of that project.

Project finance is different from traditional forms of finance because the financier principally looks to the assets and revenue of the project in order to secure and service the loan.

Need for project financiers

Project financiers are required to understand the risk-returning character of limited recourse projects from multiple perspectives. They are also required to help in learning the developments and financing the infrastructure projects. This helps to analyse all kind of projects and to do the assessment before financing. Different banks and financial companies are on the hunt for such professionals who undertake due diligence before financing any projects big or small.

Areas of specialisation

Project financing as a discipline includes understanding the rationale for financing a project, prepare a financial plan, assess the risks, design the financing mix and raise funds. In addition to this, one must understand the cogent analyses of why some project financing plans have succeeded while others have failed. A knowledge-base is required for the design of contractual arrangements to support project financing; issues for the host Government legislative provisions, public/private infrastructure partnerships, public/private financing structures; credit requirements of lenders and how to determine the project’s borrowing capacity; how to prepare cash flow projections and use them to measure expected rates of return; tax and accounting considerations and analytical techniques to validate the project’s feasibility. A multidisciplinary team of finance specialists, economists, engineers and accountants are required to ensure a project achieving its objectives.

Job prospects

As a prime trait of finance and its management, project financiers are hired by the banks and the like sources. Risk minimisation being at the heart of project finance, funding for infrastructure projects is quite an intricate area and it comes up with specific challenges in creating the appropriate structure that manages risks effectively.

job prospects

• Financiers
• Sponsors
• Professional supporter
• Credit officer’s in bank
• Project finance managers
• Consultants
• Financial advisors

  Apart from these, project financiers play pivotal role in the Government institutions, defense establishments, resource planning, supply chain management and risk analytics.

  Eligibility criteria

  A university degree along with a certificate course in project finance is a must. A degree in Law, MBA or MSc in Finance would be better.

  Remuneration

  Project finance managers may earn anything from $60,000 to $100,000 annually on average where senior project managers earn yearly salaries ranging from $70,000 to $150,000.

  Where to study

• Indian Institute of Banking and Finance, Chennai
• Indian Institute of management, Calcutta
• Amity University, Noida
• Indian Institute of Banking and Finance, Mumbai.