Project Finance for Business Development

Preface

The record of infrastructure project financings provides ample evidence of shortcomings in skills and competencies, adequate project development preparation, and failures in project management. The idiosyncrasies and complexities of large infrastructure projects and the large number of participants account for some of the project failures. However, a number of project failures have their origin in the fragmentation of approach to project finance. That is, sometimes project finance is treated as a financial engineering problem, other times as an interweaving of contracts arrangement and at different times is considered mostly a project management issue. Each of these approaches focuses on subsets of specific issues of the broader discipline of new business development which incorporates elements of strategic planning, portfolio management, and financial and business planning intended to achieve competitive advantage.

Having learned from strategic planning, new business development projects, and project financing experiences, we recognized the need to treat project financing from a broader perspective than prevailing common practices. Why? Because Business Development groups view project financing a responsibility of Project Finance Organizations (PFOs) and PFOs had little knowledge of and interaction with Strategic Planning or Business Development functions. Discussions with project participants and results of a benchmarking study confirmed our assessment. Hence, our ...