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If an important capital project does not achieve the financial and economic goals of the promoter organisation, 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 organisation and economy.
GLOMACS offers an intensive 10-day training course on Project Financial & Risk Appraisal that 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.
This GLOMACS training seminar will highlight:
- The importance of thorough project identification and appraisal using latest economic analysis of investment decisions
- Understanding the fundamentals of effective management of cash flow
- Modern concepts of risk assessment
- The advantages, disadvantages and practical applications of various risk management tools
- The increasingly important role of public-private partnership (PPP) as a risk controlling solution for delivering successful projects
This interactive and practical GLOMACS Project Financial & Risk Appraisal training seminar will provide an insight into how procurement organisations can meet the challenge to pick the best projects against a context of limited resources. It will provide an understanding of key issues in economic and financial assessment.
It will take you through the key stages of project risk assessment, and provide guidance on risk management tools to improve project outcomes. This GLOMACS training seminar will conclude with an in-depth review of the most widely used mechanism for major projects, the public-private partnership (PPP) contract; identifying, assessing and allocating the principal issues in adopting a PPP model.
By the end of this GLOMACS training seminar, participants will be able 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
This GLOMACS Project Financial & Risk Appraisal training seminar will utilise a variety of proven adult learning techniques including formal lectures and interactive worked examples to ensure maximum understanding and retention of the information presented. The daily workshops will be highly interactive and participative. There will be regular discussion on key concepts in economic evaluation of options, the uses and limitations of various techniques, and introduction to risk identification, appraisal and management, the uses and limitations of various techniques, and how best to select and structure high value projects.
Application of sound project appraisal and economic evaluation techniques will enable the organisation to forecast potential future conditions that might create strategic opportunities or jeopardise project success, thereby not only maximizing the organisation's return on capital invested in projects, but also improving its reputation for delivering positive outcomes. The project risk assessment and management techniques introduced through this GLOMACS Project Financial & Risk Appraisal training course, will enable the organisation to forecast potential future conditions that might create strategic opportunities or jeopardise project success.
By the end of this GLOMACS training seminar, your contribution to your organisation will have been significantly enhanced. You will be able to:
- Understand the benefits likely to be achieved through projects initiated after proper economic evaluation processes
- Discover how to evaluate and compare alternative/competing project investment options, and recommend projects with optimal potential benefits/value
- Apply tools and techniques that identify and address risk analysis/assessment
- Develop robust structures to allocate, mitigate or otherwise manage project risks
- Understand the core elements of public-private partnership contracting models and their use in managing project risks
Who Should Attend?
This GLOMACS Project Financial & Risk Appraisal training seminar is suitable to a wide range of professionals involved in the development, appraisal, implementation and management of projects. Those with previous experience in project appraisal will be able to share their expertise with others; the broad base of participants ensures that everyone benefits from a wide range of sector and policy perspectives.
This GLOMACS training seminar will particularly benefit:
- Project and contracts personnel in both public and private sectors
- Project Management Professionals
- Technical specialists seeking broader perspectives of project planning & implementation
- Government officials, ministries, public sector agencies
- Financial decision makers, whose techniques of decision making and analysis will be improved through attendance
- Mangers involved in planning, risk assessments and decision making
MODULE 1: Project Appraisal: Financial and Economic Factors
Source of Finance
- Potential funding sources.
- Capital markets in financing projects:
- Long Term source of finance
- Short Term source of finance
- Evaluation of the Types of Finance
- Equity Finance
- Debt Finance
- The Cost of Weighted Average Cost of Capital (WACC)
- Capital Asset Pricing Model (CAPM)
- Different measures of risks.
- Mini Case study
- 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 Pay back method.
- Decision making using EVA and NPV.
- Modified internal rate of return (MIRR).
- Application of real option to project valuations.
- 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 projects.
- Sensitivity analysis, scenario analysis and simulation.
- Mini case study
Managing, Controlling and Modelling Cash flow
- Development of Cash Flow Statement.
- Cash versus Profit
- The Cash Conversion Cycle
- Calculating and Managing the Cash Flow Cycle
- Cash Flow Ratios.
- Working Capital.
- The Cost of Maintaining Working Capital.
- Maintaining the Optimum level of Working Capital
- Working Investment Ratios.
- Preparing a Monthly Cash Flow Forecast.
- Mini Case study
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
Revisit the key concepts in decision making
- Course Summary and Checklists
- Cash Budgets & Capital Budgets reviewed.
- Financial Skills and Further Development.
- Open Forum
- Course Review
MODULE 2: Project Risk Analysis & Management
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:
- Concession contract models
- Foreign direct investments
- Joint ventures
- Service outsourcings
- Keeping structures & financing flexible to accommodate changes
Risk Identification & 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
- 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 organisational 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 making adjustments within the project cycle)
- Summaries of conclusions and group discussions
- On successful completion of this training course, GLOMACS Certificate with eligible Continuing Professional Education credits (CPE) from National Registry of CPE Sponsor and Professional Development Units (PDUs) / Contact Hours from Project Management Institute (PMI®), will be awarded to the delegates.
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