Training on Project Financial and Risk Appraisal

If an important capital project does not achieve the financial and economic goals of the promoter organization, it can result in financial losses, waste of resources and impacts across wider reputational spheres. The aim of this training course is to avoid such situations by giving participants the tools and techniques of modern economic and financial project appraisal.

Careful risk assessment in the project planning and appraisal phase is key to ensuring the successful outcome of large projects and the wider growth of the organization and economy.

The 10-day training course on Project Financial & Risk Appraisal aims to equip delegates with modern tools and techniques. Delegates will acquire skills of project evaluation and selection, identifying and comparing economic, social, and other measurable elements of projects, as well as the dependencies and risk factors relating to them.

Duration:       10 Days

Target Audience

This Macskills Development Institute training course will particularly benefit:

• Project and contracts personnel in both public and private sectors
• Project Management Professionals
• Technical specialists seeking broader perspectives of project planning and implementation.
• Government officials, ministries, public sector agencies
• Financial decision makers, whose techniques of decision making, and analysis will be improved through attendance.
• Managers involved in planning, risk assessments and decision making.

Objectives

The training will enable participants to.

• Understand and use economic & financial analytical tools and techniques using real-world examples.
• Prepare a risk identification process within a project appraisal.
• Make (and/or) contribute to strategic financial decisions and risk assessments.
• Appreciate the suitability of differing risk management solutions.
• Recognise the benefits of the PPP project model.

Course Outline

Source of Finance

• Potential Funding Sources
• Financing Options:
  • Long Term Source of Finance
  • Short Term Source of Finance
• Evaluation of the Types of Finance
• Equity Finance
• Debt Finance
• Hybrid Finance
• The Cost of Weighted Average Cost of Capital (WACC)
• Capital Asset Pricing Model (CAPM)
• Measures of Risks

Investment Decisions

• The Most Appropriate Valuation Techniques for Different Economic Sectors
• Applying Time-adjusted Measures
• Social Cost-benefit Analysis in Project Appraisal
  • Net Present Value (NPV), Internal Rate of Return (IRR) and Payback Method
• Decision-making using NPV.
• Modified Internal Rate of Return (MIRR)
• Integration of Financial, Economic and Social Appraisals to Investment Decisions
• Impact of Inflation on Financial Viability and Risks
• Foreign Exchange Risks
• Financial and Economic Analysis for Selecting a High-quality Project
• Sensitivity Analysis, Scenario Analysis and Simulation

Managing, Controlling and Modelling Cash flow

• Development of the Cash Flow Statement
• Cash vs. Profit
• The Cash Conversion Cycle
• Calculating and Managing the Cash Flow Cycle
• Cash Flow Ratios
• Working Capital Ratios
• The Cost of Maintaining Working Capital
• Maintaining the Optimum Level of Working Capital
• Preparing a Monthly Cash Flow Forecast

The Challenge of Financial Economic Decision-Making

• The Practice of Financial / Economic Analysis
• The Value-creating Company
• Corporate Value and Shareholder Value
• A Dynamic Perspective of Business
• The Agency Problem and Corporate Governance
• What information and data to use?
• The Nature of Financial Statements
• The Context of Financial Analysis and Decision-making

DAY 5

Revisit the Key Concepts in Decision Making

• Course Summary and Checklists
• Cash Budgets & Capital Budgets Reviewed
• Financial Skills and Further Development
• Re-visit Cash Flow Management
• Key Challenges in Decision making.

Project Structure Selection

• Planning Structures for Delivering Projects
• Defining a risk tolerance baseline for all activity, plus incremental procedures for high-value, complex projects
• Scaling risk management to the size and complexity of a programme or project
• Project structures to address risks from the points of view of:
  • Sponsors
  • Lenders
  • Investors
  • Contractors
• Concession Contract Models
• Foreign Direct Investments
• Joint Ventures
• Service Outsourcings
• Keeping Structures & Financing Flexible to Accommodate Changes

Risk Identification and Assessment

• Risk Identification
• Developing a Risk Matrix with Risk Ratings based on Probability and Impact
• Types of Risk
  • Hazard Risks
  • Financial (business) Risks
  • Operational (technical) Risks
  • Strategic Risks
  • Internal & Finance Risks
  • External Risks
• Risk Assessment / Analysis
• Sensitivity Analysis – (“what if analysis”)
  • Identifying Risks
  • Identifying the Impacts of Risk
  • Estimating the Likelihood of Risks Occurring
  • Estimate the Cost of Risk
• Risk Response / Mitigation Planning 
• Monitoring and Communicating Risk

Risk Management

• Objective of Project Risk Management
• Tools and Techniques for Risk Management
  • Avoidance – modifying a project plan.
  • Transference – shifting consequences and responsibilities.
  • Mitigation – preventative action
  • Acceptance – accepting risk outcomes.
• Limitations of Risk Management
• Use of Insurance & External / 3rd Party Mechanisms in Risk Strategies
• Constructing a Risk-adjusted Project Cost Model
• Using Risk Factors to Test Affordability
• The Roles of Incentives, Sanctions and Risk Sharing
• Using Project Design, Financial and Organizational Arrangements as Risk Management Tools

The PPP Contract Model

• The General Principles of How Project Appraisal, Selection, Design and Risk Management ensure more measurable, controllable, successful projects.
• What are Public-Private Partnerships (PPPs)?
• The Dynamics of PPPs & How Key Risk Areas can be Managed.
• Use of PPPs in Different Sectors and Services
• The Roles and Relationships of Public and Private Parties
• Principal Ways PPP Contracts Can Be Properly Managed
• What are the Lessons for Adopting and/or Adapting PPP Models Across Future Projects?

Project Funding Solutions

• Embedding Risk Management into Normal Operations
• Allotting Appropriate Resources for Risk Management Activities
• Integrating Risk Management into Project Protocols and Controls
• Risk Management Monitoring and Control throughout the Project Lifecycle to Improve and Guide Risk Management Processes
• Evaluating Effectiveness of Risk Response Actions (and adjusting within the project cycle)
• Summaries of Conclusions and Group Discussions

Certification

• Upon successful completion of this training, participants will be issued with Macskills Training and Development Institute Certificate

Training Venue

• Training will be held at Macskills Training Centre. We also tailor make the training upon request at different locations across the world.

Airport Pick Up and Accommodation

• Airport pick up and accommodation is arranged upon request.

Terms of Payment

• Payment should be made to Macskills Development Institute bank account before the start of the training and receipts sent.