Investment in the project on the part of the ifc would generate valuable social, financial, and economic benefits, not only for the people and government of mozambique but on a more global level as well, allowing the international investors, suppliers, distributors, and sponsors involved in the deal to enjoy. Financing the mozal project in mozambique by maximilian wegener author ivan. At june 1997, a set in the international finance corp. Financing the mozal project case study solution and. The financing of the mozal project in mozambique slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Often bandied about in trade journals and industry conferences as a new financing technique, project finance is actually a. The mozal project was the first major foreign investment. Financing the mozal project in mozambique maximilian wegener ivan ivanov frederik schreus elaboration business. Financing the mozal project case solution term paper warehouse. Mozal, located 20km west of maputo, is an aluminum smelter with a production capacity of 500,000 tons per year. Mozal project free download as powerpoint presentation. Thus, the analysis of mozals impact on the mozambican economy needs to start from the direct impact of production and sale of aluminum. And in particular, most of the research to date has focused more narrowly on risk management through financial instruments.
The mozal project international finance corporation loans scribd. Aluminum smelting project bauxitemining and development resources funds mozal s. Financing the mozal project case solution and analysis. Case study 11 financing the mozal project case study assignments. The mozal project, notwithstanding easterlys 2001 criticism of world bank and international finance corporation ifc activities, is a wonderful example of how a mega project can change a. Case study financing the mozal project abstract this document intends to give an answer to the second case study of corporate governance and restructuring course, financing the mozal project, which focuses on project finance within the african project of aluminium smelter, the mozal structure. Financing the mozal project case study solution, financing the mozal project case study analysis, subjects covered capital investments developing countries emerging markets political risk project finance by benjamin c. Financing the mozal project case solution,financing the mozal project case analysis, financing the mozal project case study solution, question1. Project finance is generally used to refer to a nonrecourse or limited recourse financing structure in which debt, equity and credit enhancement are combined for the construction and operation, or the refinancing, of a particular facility in a capitalintensive industry. The mozal smelter project project management institute. Project finance is the process of financing a specific economic unit that the sponsors create, in which creditors share much of the ventures business risk and funding is obtained strictly for the. The paper analyses the role and stakes of each sponsor of the project. The mozal project in mozambique the mozal project was the first major foreign investment project in mozambique.
Financing the mozal project case analysis, financing the mozal project case study solution, financing the mozal project xls file, financing the mozal project excel file, subjects covered capital investments developing countries emerging markets political risk project finance by benjamin c. Apr 15, 2010 the financing of the mozal project in mozambique slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Financing the mozal project case solution and analysis, hbr. Mozals business is the production and sale of aluminum. Financing the mozal project politics institutions and project finance. Since the project involves an investment in a foreign country and the project will be exposed to the government act of privatizing the mozal project and this was the reason why gencor elected to finance the project in the form of the project and financing and did not opt for the corporate financing option. Pdf case study 11 financing the mozal project case study. Download citation financing the mozal project subject areas.
Financing the mozal project case harvard business school. Financing the mozal project case solution and analysis, hbs. Case study financing the mozal project p a g e 2 19 abstract this document intends to give an answer to the second case study of corporate governance and restructuring course, financing the mozal project, which focuses on project finance within the african project of aluminium smelter, the mozal structure. Mozal i began operating in september 2000, followed by mozal ii in 2004. While project finance bears certain similarities to syndicated lending, there are a host of specific issues that mean that it is essentially a specialized discipline unto itself, effectively a discrete subset of syndicated lending. The wharton school project finance teaching note 3 there is no singular definition of project finance.
Compared to other areas of finance, the field of project finance is a relatively unexplored area for both empirical and theoretical research. After describing the characteristics of pf, its historical origins and its unique benefits for empirical inquiry, i summarize the findings of academic research from. Investment in the project on the part of the ifc would generate valuable social, financial, and economic benefits, not only for the people and government of mozambique but on a more global level as well, allowing the international investors, suppliers, distributors, and sponsors involved in the. Involvement of international development corporation govt. For these hours to appear on your certificate, you must. Abstract project finance is the process of financing a specific economic unit that the sponsors create, in which creditors share.
Mozal project final case study financing the mozal. Financing the mozal project 10 steps case study analysis. A case study in project finance in ongc with special emphasis on funding through export credit agencies submitted by puneet goyal 08bshyd0597 ibs, hyderabad project undertaken in. Mozalproject international finance corporation cost. April 15, 2003 benjamin esty financing the mozal project mozal represents a leap of faith in the economy of a poor african country that is 1. Mozal project final case study financing the mozal project. Financing the mozal project case solution term paper. Bwibo adieri lecturer 7th march, 2014 case study mozal project international investment in an underdeveloped country question 1 summarize the issues and factors that posed risks to the mozal project. Financing the mozal project case solution, this case is about competition, costs, emerging markets, entrepreneurial finance, government, it, project management, risk management, strategy execution p. The land where the smelter sits was originally farming land and through negotiation, the farmers agreed to be relocated with compensation and new dwellings. It accomplished it 21% below budget and 4 months before planned completion.
Investment management and financial innovations, volume 14, issue 1, 2017. Mozal project international finance corporation yield finance. Impacts of the mozal aluminium smelter on the mozambican. Mozal project case study financing the mozal project. It is june 1997, and a team from the international finance corp. What is the real expected return using the capm so, why would gencorpalusaf invest in the mozal proje. Mozal project case study financing the mozal project case. The keys to project financial management the keys to project financial management michael mclin maxim consulting group this session is eligible for 2 continuing education and 2 contact hours. Ifc employs a multidisciplinary team including economists, industry experts and. Solution of harvard business case study on mozal project capital structure. It invests in the developing countries which are mostly unable to attract other lenders. Have your badge scanned at the door attend 90% of this presentation. International finance corporation invests to improve the quality of living and to alleviate poverty in developing countries.
Project finance is generally used to refer to a nonrecourse or limited. Mozal project international finance corporation euro. It is intended to be a berlitz course for recent law school and business school graduates seeking initiation into the industry, and a desktop reference for notsorecent graduates. Project finance can be more costeffective than conventional direct financing when it permits a higher degree of leverage and the increase in leverage produces tax shield benefits, resulting in a lower overall cost of capital for the project. Cheng, faculty business upper iowa university hong kong campus abstrast project financing is a specific financial arrangement for a selected project. Publicprivate partnership leadership reflection paper guidelines for extra credit alternative euro disney. Definition of project finance the term project finance is used loosely by academics, bankers and journalists to describe a range of financing arrangements. Constructing a 250,000tonperannum primary aluminum smelter on a 1. The ifc should immediately seize the opportunity presented in the financing of mozal. Four factors made this recommendation controversial. In addition, the mozal project has qualified sponsors. Financing the mozal project harvard business publishing education. Document from the year 20 in the subject business economics investment and finance, grade.
Mozalproject free download as powerpoint presentation. When a company is considering a new project or investment, it must have some method to evaluate whether to proceed. The mozal project involves the establishment of a venture between three entities eskom, alusaf and mozambican government and since the project will require automated technology and will involve the mozambican government, which is an underdevelopedcountry, therefore, the project will be exposed not only to the technological risks but will also. The dabhol power project international rivers network and the bujagali dam project a, spanish version lesotho hospital and filter clinics. The wharton school project finance teaching note 2 i.
Risk allocation and mitigation methods for financing cross. This article discusses these challenges and the ways that awardrecipient mozala consortium of international stakeholders comprised of billiton and mitsubishi. Mozambique with ability to attract fdi, an important successes factor has been the role of large scale investment in the industrial sector and extractive industries known as megaprojects mozal project for aluminium and sasol project in the gas sector which were responsible for the increase of fdi inflows in the late of 1990 and nearly 2000s. Project finance in theory and practice designing, structuring, and financing private and public projects stefano gatti amsterdam boston heidelberg london new york oxford paris san diego san francisco singapore sydney tokyo academic press is an imprint of elsevier. Financing the mozal project in mozambique publish your. The project is supposed to be financed with a 50% debt and 50% equity.
Using a sample of 495 project finance loan tranches worth. The decision to finance mozal considered that the project. In this lesson, youll learn how relevant cash flows can help with this decision. Financing the mozal project in mozambique by maximilian. The mozal project free download as powerpoint presentation. The bank played an important role in the first phase of the project by providing financial assistance to mozambique to fund its equity participation in the project, and by supporting the motraco project for power transmission facilities for the smelter. Financing the mozal project table of content 1 introduction.
If you continue browsing the site, you agree to the use of cookies on this website. Alusaf already built and operated a larger project of the same type, an aluminum smelter with double the volume the hillside smelter in richards bay with a yearly capacity of 500,000 tons. Mozal aluminium is our aluminum smelter and transport infrastructure, just 20 kilometres west of mozambiques capital city, maputo. Financing the mozal project in mozambique maximilian wegener ivan ivanov frederik schreus elaboration business economics investment and finance publish your bachelors or masters thesis, dissertation, term paper or essay. Financing the mozal proect what solution would you. Investigating the mozal aluminium smelter in mozambique.
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