Advanced Risk Management and Infrastructure Finance

API 148 Subject & Catalog Number

Description

This course provides an advanced treatment of financial risk management and its application to infrastructure finance—where governments and firms make large-scale, long-lived investment decisions under uncertainty, regulation, and public–private interaction. The material is organized into four segments: financial structure, value, risk, and public-private partnerships in infrastructure, and develops a rigorous framework for analyzing how risk is measured, priced, and managed in the financing of infrastructure. 

Core topics include economic and financial rates of return, measurement of risk exposure, cost of funds, capital structure, valuation methods, dynamic hedging using futures and swaps, and credit risk models and derivatives. Applications, examined primarily through infrastructure cases, address project finance, public-private partnerships, project appraisal, social and private value, climate finance, risk allocation, subsidization, land-value capture, public sector comparators, commodity, interest-rate, and currency risk hedging, credit enhancement, governance, and regulation.

Recommended Prep

Prerequisite: Prior coursework in finance (e.g. API-141 or equivalent introductory course) or permission of the instructor. The course assumes familiarity with the structure and pricing of the fundamental financial instruments: bonds, stocks, forwards and options