Project Finance department helps to facilitate loans for long-term projects of the companies. Since any financial institution has to consider the viability of the project before determining the loan amount to be given, the project finance department has to ensure that its liaisons with the team members involved in the project to:
- Understand the volume of the project
- Risks involved in the project
- Any peculiarities of the project which need consideration
- Financial requirements for the project
- Forecast the expected revenues
At the entry level, candidates join as Associates / Executives. Typically they have MBAs in finance or are CAs. Some are even graduates with prior experience working on projects.
- Most Project Finance firms have teams divided by industry expertise. In-house teams work on their company’s projects which are usually in one particular sector (unless it’s a diversified conglomerate – then there are different teams within)
- Executives have to examine if a project is viable. For this, they use financial analysis and do thorough research on the project. They run several “what-if” or scenario analyses on the project to understand the risks.
- Once a project is deemed viable, the work of getting it funded starts. Marketing materials are then put together and lenders are approached. The firm often commits its own money to the project and needs to get internal approvals for the project.
- Since the projects are usually long drawn and extend over several years, managing the project requires daily/weekly reporting, handling compliance and legal issues, accounting, fund management and general project planning on an ongoing basis.
- Prepare financial models, be adept in preparation of spreadsheets, etc.
- Work on due diligence, and compliance as per regulation, documentation, etc.
- Work in close collaboration with project implementation teams for analyzing the fund requirements.
- Coordination with lenders to facilitate the smooth procedure of the analytics.
- Ensuring completion of data in a timely manner.
- Preparation of periodic reports as per management’s requirements.
Companies to target:
- Consultant companies: IL&FS, IDFC, E&Y, KPMG, PwC.
- Infrastructure players: L&T, GMR, Reliance Group, DLF, IBM, HP.
Project Finance is a lucrative career indeed, since, debt is the most popular method of sourcing funds for projects for major companies. Of course, proficiency in preparation of financial models and spreadsheets is called for in this profile. Hence, it will be beneficial for the candidate to learn financial modelling.