The purpose of the course is to provide students with a solid understanding of fundamental techniques for structuring, analysing and implementing Direct and Sustainable Investments in real assets (mainly infrastructure and industrial plants), focusing on project and export financing methodologies as prevailing on the international financial markets. Knowledge of the 'project based' approach - growing strongly in this historical phase - appears to be a necessary complement to the typical Corporate Finance approach. The issue of sustainability (ESG topic) also takes its own specific characteristic in the project investing (equity) and financing (finance) perspective. The course will provide students with a sound technical background based on sophisticated tools and quantitative models, required for structuring investments, with a particular attention to: a) project structuring; b) risk analysis and risk management c) project evaluation from a twofold perspective: lenders and equity players; d) definition and negotiation of the optimal financial structure (debt, equity and mezzanine) on the basis of the main techniques prevailing on international financial markets; e) financial modelling and M&A skills; f) sustainability criteria and tools (sustainable finance). Extensive reference will be made to the most typical legal terms and conditions of the most typical contracts pertaining to the network of documents of a project, with special attention to the financial contracts. In view of the growing importance for international financial markets of the sustainability of new investments in real assets - especially from an environmental and social point of view - a significant part of the course will be devoted to an in-depth understanding of the technical pillars of "sustainable finance", starting from the Principles for Responsible Investment (PRIs) launched by the UN (2006), the related ESG (Environmental, Social and Governance) strategies and the most advanced standards and regulations. Furthermore, the course will analyze the specific sustainable finance instruments and tools applicable to infrastructure and industrial plants projects (e.g., taxonomies; sustainability standards applied to projects by multilateral and commercial banks; ESG-related bonds; ESG ratings and impact metrics). Finally, the course will provide a deep dive into the analysis of the new systemic risks linked to climate change and how they affect the risk/financial analysis of projects, also introducing the concept of ESG Key Performance Indexes (“KPIs”) for integrating and monitoring sustainable criteria within the project structure.

Knowledge and understanding: The course will offer key theoretical tools for structuring and analyzing greenfield investments in real assets (such as infrastructures and industrial plants), with a deep knowledge in project structuring; risk analysis; ESG and sustainability factors; financial modelling, including stress tests and sensitivity analysis of project’s cash flows and related key financial ratios - KPIs). The course also provides students the basic skills to understand best practices on the international markets for structuring and syndicating large project finance deals. Finally, the course will introduce students to the main principles, strategies and tools of responsible investments (PRI-ESG) and sustainable finance, applied to investments in real assets projects. Applying knowledge and understanding: At the end of the course the students will be able to: • Analyze and structure an international project finance transaction with the inclusion of all major parties usually involved; • Perform a risk analysis with the understanding of the best risk allocation balance among parties and the most used mitigation factors, including legal and financial tools available for this purpose; • Define and optimize a capital structure of an international PF transaction using various source of debt and equity incorporated within different financial instruments, within a large syndication on the market; • Structure a simple financial model calculating the main key financial ratios from the lenders’ (debt providers) and sponsors’ (equity investors) point of view, also performing sensitivity analysis and stress tests; • Understand the key principles of sustainable finance and ESG factors as well as all the most important principles and tools applicable to a sustainable long-term project finance transaction. Making judgements: At the end of the course, we expect students to be able to analyse and structure a project finance transaction according to the best standards prevailing on the international markets, demonstrating a sophisticated ability in risk analysis and risk allocation. Furthermore, it is the aim of the course to give students an understanding of financial modelling, including stress test and sensitivity analysis. Students are also expected to demonstrate an understanding of sustainable finance and ESG principles, with particular reference to long-term investments in real industrial and infrastructural assets. Understanding ESG strategies and the emerging taxonomic criteria for sustainable activities; the associated climate physical and transitional risks; and the KPIs defining the materiality of investment-related effects (and any ESG ratings), will also be very important. Communications Skills: This course will enable students to acquire, understand and use the main technical, legal and financial terms and concepts related to project financing transactions and sustainable finance, especially with reference to greenfield investments in industrial and infrastructure assets. Learning skills: This course will contribute: • to allow students to determine and evaluate the soundness of a project finance transaction; managing the risk analysis-allocation and to set up a financing structure combining various financial source (equity, debt, mezzanine, bonds, etc); • to set up financial models representing the base case of a project, applying stress tests and sensitivity analysis in order to verify the soundness of the deal in respect to potential changes and shocks; • finally, this course will also give students the knowledge of the main pillars of sustainable finance as well as the integration of ESG criteria into economic and financial analysis.

The course is articulated into four main theoretical parts plus tutorials/exercises, as follows: • “Basic definitions & tools”: introduction to project finance techniques and definitions widely used on the international markets for structuring, analysing and implementing Direct and Sustainable Investments in real assets (mainly infrastructure and industrial plants); key features of a project finance (“PF”) deal (definitions, project/financial structure and parties involved; different structure of equity investment/debt financing; financial markets; etc.). • "Inside the project": risk analysis and management; evaluation criteria for equity players and debt providers and key financial ratios; Capital structure of a project finance deal; main legal terms and conditions. • “Sustainable finance”: key principles & tools for understanding, evaluating and applying ESG criteria, requirements and standards to PF transactions. • “Financial model”: financial modelling, project evaluation; key financial ratios and related financial covenants and sensitivity-analysis.

Gatti, S. (2023, 4th edition). Project Finance in Theory and Practice: Designing, Structuring, and Financing Private and Public Projects (Third Edition). Academic Press. Slides will be provided and official documents or Publications may be suggested.

- Lessons with the support of dedicated material (slides and audiovisuals); - Problem based learning; - Analytical exercises; - Interactive case studies.

Students will be assessed during the course through various exercises and at the end of the course with a final examination. The final examination will cover the entire program but its overall weight on the grade may not exceed 30% of the total. The final examination will be structured as follows: Written exam including the following sections: Section 1: multiple choices (n.22 questions – 0.5 points each – 30 minutes). Section 2: Q&A (n.8 open questions - up to 1,5 points each – 50 minutes). Section 3: open questions on financial modelling issues and financial modelling exercises (n.2 questions up to 2 points each; n.2 exercises up to 2.5 points each; 60 minutes). Active participation in presence with discussions and debates on the topics presented during the lessons will be positively considered as well as the participation in activities inspired by the Dublin Descriptors.

Motivation and active participation during the course, preferably with a satisfactory grade (i.e.no less than 27/30).