Project Finance in Theory and Practice

Designing, Structuring, and Financing Private and Public Projects


  • Stefano Gatti, Professor at Bocconi University in Milan, Italy; consultant for banks and manufacturing firms in Italy and a trainer for managers and government members in Russia, Africa and China.

This book presents comprehensive coverage of project finance in Europe and North America.  The Second Edition features two new case studies, all new pedagogical supplements including end-of-chapter questions and answers, and insights into the recent market downturn.  The author provides a complete description of the ways a project finance deal can be organized-from industrial, legal, and financial standpoints-and the alternatives available for funding it.  After reviewing recent advances in project finance theory, he provides illustrations and case studies. At key points Gatti brings in other project finance experts who share their specialized knowledge on the legal issues and the role of advisors in project finance deals.
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Upper-division undergraduates and graduate students worldwide working in subjects studying the financing of large-scale single projects, usually called "project finance." These students are typically interested in working in the finance departments of large corporations or in structured finance departments of large commercial banks.


Book information

  • Published: August 2012
  • ISBN: 978-0-12-391946-5


"Professor Gatti offers the reader an original viewpoint combining rigorous theory with constant reference to market best practices." -- Roberto Albisetti, IFC World Bank Group and University of Genoa

"Gatti's book provides comprehensive and coherent coverage of project finance, including  transaction structures, the institutional environment, and  financial analysis.  Its presentation of practical examples and cases makes it a great teaching tool."  -- Raymond Hill, Emory University

"A good read as well as an excellent reference book, Project Finance in Theory and Practice is very valuable as it is successfully pitched to be useful to readers of all levels of education and experience and explains the roles and objectives of the different parties very clearly. The book can be used both for training and as a guide to best practices." -- Alexander S. Moczarski, President and Chief Executive Officer - Guy Carpenter - Marsh & McLennan Group

 Project finance is a long-established technique for non recourse financing which is extremely relevant today, with more and more infrastructure and other large projects being developed. Professor Gatti and the other contributors use practical concepts and very relevant case studies to clearly explain Project Financing to its readers. It is a must read and a reference book for professionals and practitioners.  -- Jean Pierre Mustier, UniCredit Deputy General Manager and Head of CIB Division


Table of Contents

Foreword by William L. MegginsonPrefaceAcknowledgmentsAbout the AuthorChapter 1 Introduction to the Theory and Practice of Project FinanceChapter 2 The Market for Project Finance: Applications and the SectorsChapter 3 Project Characteristics, Risk Analysis and Risk ManagementChapter 4 The Role of Advisors in a Project Finance Deal (Stefano Gatti, Massimo Novo, Fabio Landriscina and Mark Pollard)Chapter 5 Valuing the Project and Project Cash Flow Analysis (Stefano Gatti)Chapter 6 Financing the Deal (Stefano Gatti)Chapter 7 Legal Aspects of Project Finance (Massimo Novo)Chapter 8 Credit Risk in Project Finance Transactions and New Basel Capital Accord (Stefano Gatti)Case StudiesCase Study 1 CogenerationCase Study 2 Italy Water System (Stefano Gatti, Daniele Corbino, Alessandro Steffanoni)Appendix to Case Study 2: Structure and Functioning of the Simulation Model Case Study 3: Hong Kong Disneyland Project Loan Glossary and AbbreviationsReferencesIndex