Events & Programs : Discussion Series

Lecture Series Discussion Series Tour Series Happy Hour EnergyNight Alumni Resources Energy Conference Industry/Careers Entrepreneurship Education Campus Energy

"Development and Financing of New Power Plants"

6:00-7:00pm, Wednesday, April 2
Thirsty Ear Pub, Basement of Ashdown House
Leader: Michael Hogan

Key Questions

1. Why use project finance?
2. Does the use of project finance increase or decrease the project sponsor's risk? What about the customers' risk?
3. Why was the Dabhol power project such a spectacular failure?

Handouts

• Infrastructure Project Development and Financing
• Graph on Development Risk Management

Preparatory Readings

• On classic project finance: Using project finance to fund infrastructure projects, Brealey et al. (1996)
• On merchant project finance: Financing Merchant Power Plants in the United States, Kriebel and Hornstein (2000)
• On how rating agencies think of project financing: The importance of being economic: credit risks of merchant power plants, Johnson (1999)
• An assessment of the post-boom hangover: Gas TurbineMania: The Merchant Power Plant, Public Utilities Fortnightly (June 2002)

Other References

• Rethinking foreign infrastructure investment in developing countries, Ramamurti and Doh, Journal of World Business, May 2004 - see in particular section 4, and more specifically 4.3
• An empirical analysis of limited recourse project finance, Kleimeier and Megginson, July 2001 - just read the introduction
• Fuel procurement strategies to support merchant power plant financing, Oliver, The Journal of Structured Finance, Summer 2000 - for a closer look at how a specific area of risk was approached in merchant financings
• Merchant plant finance looks to insurance for solutions, Electric Light & Power, October 2001 - for a look at the kind of goofy pseudo-risk-mitigation products that were being dreamed up at the height of the boom