Postgraduate Course: Fundamentals of Infrastructure Finance (CMSE11478)
Course Outline
| School | Business School |
College | College of Arts, Humanities and Social Sciences |
| Credit level (Normal year taken) | SCQF Level 11 (Postgraduate) |
Availability | Not available to visiting students |
| SCQF Credits | 10 |
ECTS Credits | 5 |
| Summary | The Fundamentals of Infrastructure Finance course aims to integrate conventional finance with energy, climate and urban infrastructure finance. The course will provide a basis for understanding the links between conventional corporate finance and infrastructure finance. The course will provide students essential skills for undertaking project cash flow assessments and risk analyses. Students will come away from the course with the skills to both implement and critique climate mitigation and adaptation project valuation methods with focus on energy and transportation areas. |
| Course description |
The course provides an overview of the different types of financial instruments and different market participants involved in financial and energy markets, the return objectives and risk management approaches. The course will teach students basic skills in building deterministic cash flow models and apply these models for energy, transportation and climate mitigation and adaptation projects.
The course will draw on both theoretical and applied concepts in delivering lectures on all topics. Lectures will also be delivered by experienced practitioners, with knowledge of energy finance. In addition to introducing students to the wider literature on corporate finance related to energy project finance, recent publications and case studies will be used to ensure that students will come out of the course with specific skills in the evaluation of risks and opportunities associated with financing energy projects.
Outline Content
1. Introduction to infrastructure finance
2. Energy system objectives and key project finance issues
3. Introduction to financial markets and key market participants
4. Macroeconomic policy-making process
5. Assessing the economics of energy projecst: project cash flow analysis
6. Finance urban infrastructure projects
7. Technology learning rates
8. Energy risk management
9. Energy-related financial derivatives
10. Green finance and climate finance and investment
Student Learning Experience
Formal teaching occurs in lectures, tutorials, and computer lab sessions. Much of the learning will be the result of students' own reading and reflection, and preparation for coursework. A high degree of student participation is expected, through in-class discussions. Scholarly endeavours are fundamentally about building on the discoveries and insights of others, and we hope that team cooperation will enrich all students. There will be time for questions and discussion in class as well as practice sessions for cash flow modelling in computer labs.
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Entry Requirements (not applicable to Visiting Students)
| Pre-requisites |
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Co-requisites | |
| Prohibited Combinations | |
Other requirements | None |
Course Delivery Information
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| Academic year 2020/21, Not available to visiting students (SS1)
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Quota: None |
| Course Start |
Block 1 (Sem 1) |
Timetable |
Timetable |
| Learning and Teaching activities (Further Info) |
Total Hours:
100
(
Lecture Hours 10,
Seminar/Tutorial Hours 5,
Formative Assessment Hours 1,
Revision Session Hours 1,
Programme Level Learning and Teaching Hours 2,
Directed Learning and Independent Learning Hours
81 )
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| Assessment (Further Info) |
Written Exam
100 %,
Coursework
0 %,
Practical Exam
0 %
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| Additional Information (Assessment) |
Written Examination (Individual) 100% - Assesses LO1, LO2, LO3, LO4, LO5 |
| Feedback |
For lab cases, formative verbal feedback will be provided to the students each week during lab sessions. Exam feedback will be provided by the Course Organiser after the exam papers are marked. |
| Exam Information |
| Exam Diet |
Paper Name |
Hours & Minutes |
|
| Main Exam Diet S1 (December) | CMSE11478 Fundamentals of Infrastructure Finance | 2:00 | |
Learning Outcomes
On completion of this course, the student will be able to:
- Apply concepts related to corporate finance to energy, climate friendly infrastructure finance cases.
- Develop economic assessment models for different infrastructure projects.
- Develop overarching strategies for mitigating and/or transferring energy and climate risks.
- Describe and critically discuss the principal features of the energy system, energy markets and capital markets.
- Assess different financing instruments for infrastructure finance.
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Reading List
AFME (Associations for Financial Markets in Europe), 2015. Guide to Infrastructure Financing. https://www.afme.eu/Portals/0/globalassets/downloads/publications/AFME-Guide_to_Infrastructure_Financing(2).pdf
CPI (Climate Policy Initiative), 2018. Understanding and Increasing Finance for Climate Adaptation in Developing Countries. file:///C:/Users/xilia/Desktop/EFP/Understanding-and-Increasing-Finance-for-Climate-Adaptation-in-Developing-Countries-1.pdf
European Environment Agency, 2017. Financing Urban Adaptation to Climate Change. EEA Report, 2/2017.
https://www.eea.europa.eu/publications/financing-urban-adaptation-to-climate-change
GARP (Global Association of Risk Professionals), 2009. Foundations of Energy Risk Management, Wiley Finance.
Mott MacDonald, 2011. UK Electricity Generation Costs: Update.
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/65716/71-ukelectricity-
generation-costs-update-.pdf (Methodology Section)
Richard A. Brealey, Stewart C. Myers and Alan J. Marcus, 2017. Fundamentals of Corporate Finance. McGraw-hill/Irwin Series in Finance.
UNEP (United Nation Environment Programme), 2019. Global Trends in Renewable Investment 2019.
https://wedocs.unep.org/bitstream/handle/20.500.11822/29752/GTR2019.pdf?sequence=1&isAllowed=y
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Additional Information
| Graduate Attributes and Skills |
Knowledge and Understanding
After completing this course, students should be able to:
- Demonstrate a critical understanding of the principles of corporate finance and apply the understanding of corporate finance to solving problems in the energy sector
- Describe and critically discuss the principal features of the energy system, energy markets and capital markets
- Fundamental issues in managing uncertainties in infrastructure finance
- Critically evaluate financial decision-making within energy firms/utilities and cities
- Develop overarching strategies for mitigating and/or transferring energy and climate risks
Practice: Applied Knowledge, Skills and Understanding
After completing this course, students should be able to:
- Develop cash flow models for energy, climate adaptation or urban infrastructure project
- Calculate levelised cost of energy
- Advise on energy and climate risk management approaches
Cognitive Skills
After completing this course, students should be able to:
- Critically evaluate new and complicated ideas
- Investigate the quality of data in project finance
- Make informed judgements in the absence of complete or consistent data
- Offer creative solutions and insights on complex issues
Communication, ICT, and Numeracy Skills
After completing this course, students should be able to:
- Communicate technical, conceptual and critical information clearly and concisely
- Develop an Excel spreadsheet to assess the economics of infrastructure projects and develop project finance scenarios
Autonomy, Accountability and Working with Others
After completing this course, students should be able to:
- Provide and receive peer-feedback
- Collaborate with others from different professional knowledge, educational and cultural backgrounds
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| Keywords | Not entered |
Contacts
| Course organiser | Dr Xi Liang
Tel: (0131 6)51 5328
Email: Xi.Liang@ed.ac.uk |
Course secretary | Ms Rhiannon Pilkington
Tel: (0131 6)50 8072
Email: Rhiannon.Pilkington@ed.ac.uk |
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