INFRASTRUCTURE FINANCING - 2023/4

Module Overview

This module is aimed at familiarising students with the concept of the economics of infrastructure. It introduces the background behind investment and funding required for the financial planning of infrastructure and discusses the various forms of funding available for infrastructure (public, private and combined), including their merits and limitations. Financing models for different infrastructure sectors are described. Different types of risks associated with infrastructure investments are reviewed and their assessment and prioritisation within changing economic climates is studied. Within the context of whole-life infrastructure engineering, this module covers the initial financial planning phase of infrastructure projects with other infrastructure-themed modules (ENGM265, ENGM266) covering the remaining life-cycle stages and expanding further on whole-life risks (ENGM264).

Module provider

Sustainability, Civil & Env Engineering

Module Leader

IMAM Boulent (Sust & CEE)

Number of Credits: 15

ECTS Credits: 7.5

Framework: FHEQ Level 7

Module cap (Maximum number of students): N/A

Module Availability

Semester 1

Prerequisites / Co-requisites

None

Module content

Indicative content includes:

 

Overview & Introduction: Infrastructure project types, History of infrastructure project finance, Risk identification & analysis, Banks & risk, Risk mitigation and valuation methods, Terminology and definitions in infrastructure finance

 

Funding Structures: Equity and debt, Government guarantee and Corporate guarantee structures, Project finance structure, Public private partnerships (PPP), Privatised public service utilities, Availability payments

 

Sources of Funds: Private equity, Pension and life insurance funds, Sovereign wealth funds, Cash-flow models and analysis, Development bank loans, Export and buyer credits, Bonds, Leasing, Mezzazine capital, Measures and indicators used by investors

 

Public vs Private Finance: Public private partnerships (PPP), Public sector comparator (PSC), Risk identification and allocation (PSC vs PPP), The EU bid process for PPP concessions, Project agreements, Key clauses and features, Sales contracts, Loan agreements

 

Case studies: Financing models on different infrastructure sectors including transport, energy, waste and water, municipal

This module is within the core subject of Construction Management

Assessment pattern

Alternative Assessment

None.

Assessment Strategy

The assessment strategy is designed to provide students with the opportunity to demonstrate:

• their ability to propose different financing models for infrastructure projects considering different sources of funding and types of risks covering all three sustainability pillars (economic, environmental and social)


• the ability of the students to develop cashflow-based project appraisal and evaluation techniques, contributing towards the development of their employability skills on formulating and presenting convincing business cases.

  Thus, the summative assessment for this module consists of:

• Coursework in the form of a realistic case study to assess the ability of students to undertake an investment appraisal and financial calculations through digital tools (Excel) and present them professionally.


• Exam covering topics from across the entire content delivered.

 

  Formative assessment and feedback

 

Formative assessment will be through discussions in the weekly seminars, the discussion forums created in SurreyLearn on a weekly basis and following the quiz at the end of the semester.  Individual written and/or verbal feedback will be given on the coursework assignment and via a feedback session reflecting on good practice and poor practice examples extracted from the coursework submissions.

Module aims

• review the sources of funding and the financing models available for infrastructure planning and development
• explain the parameters that are directing prioritisation of infrastructure investments
• demonstrate how to develop various options for infrastructural goals with a view to determine the optimum through the use of cash flow analysis.
• review the potential risks associated with investments in infrastructure

Learning outcomes

Methods of Teaching / Learning

The learning and teaching strategy is designed to:

• enable students to develop a critical understanding of the essential inputs and outputs required for undertaking an infrastructure investment appraisal and appreciate the variations across different project types on a global scale.

To achieve the above, the following learning and teaching methods will be used: captured content, seminars, guided learning, independent learning, and self-reflection. Specifically, the first half of the module starts by introducing new concepts and techniques used within the context of project finance and provide illustrative examples of their use. The second half of the module continues with the discussion of case studies from various infrastructure sectors, covering both developed and developing countries, and critique the approaches and decisions followed in real infrastructure projects. In seminars, students will be encouraged to be active participants in group discussions, enabling them to develop as informed, confident and engaged independent learners and reinforce and apply the module content. They will be asked to provide their opinions about real-life case studies reviewed in class and constructively consider opinions to shape their thinking. Students are expected to extend their reading beyond the core material and to make use of additional material provided to support each topic. A quiz at the end of the module will assist students towards reflective review of their independent learning and prompt them to think out of the box. Formative feedback will be provided to students during the interactive seminar sessions.

Indicated Lecture Hours (which may also include seminars, tutorials, workshops and other contact time) are approximate and may include in-class tests where one or more of these are an assessment on the module. In-class tests are scheduled/organised separately to taught content and will be published on to student personal timetables, where they apply to taken modules, as soon as they are finalised by central administration. This will usually be after the initial publication of the teaching timetable for the relevant semester.

Reading list

https://readinglists.surrey.ac.uk
Upon accessing the reading list, please search for the module using the module code: ENGM263

Other information

Surrey's Curriculum Framework is committed to developing graduates with strengths in Employability, Digital Capabilities, Global and Cultural Capabilities, Sustainability and Resourcefulness and Resilience. This module is designed to allow students to develop knowledge, skills and capabilities in the following areas:

Digital capabilities: The module’s assessment requires students to carry out cash-flow calculations in a professional and organised way through Excel. As with all MSc modules, students are expected to engage with online material and resources via SurreyLearn and encouraged to communicate with one another through the discussion forums created and the self-study questions that have been developed for them.

Employability: The coursework assignment exposes the students to a real-life case study which will enable them to utilise their learning to solve infrastructure finance issues. Students are required to formulate succinct and persuasive business case proposals and identify potential conflicts of interest.

Global and Cultural Capabilities: The case studies reviewed in the module range from projects in developed countries to projects in developing countries, hence providing a global perspective on the most important factors that drive infrastructure finance around the world. The online discussion forums created in SurreyLearn will facilitate engagement with distance-learning students from abroad.

Sustainability: Lectures and assessments cover the range of political, environmental and social risks that need to be taken into account towards developing financing plans for infrastructure projects.

Resourcefulness and Resilience: The module assessment involves students to make and justify own assumptions, devise and manipulate financing plans, through sensitivity analyses, to enhance financial viability of infrastructure projects. Students are also promoted to actively engage with in-class group discussions as well as through SurreyLearn discussion forums.

Please note that the information detailed within this record is accurate at the time of publishing and may be subject to change. This record contains information for the most up to date version of the programme / module for the 2023/4 academic year.