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Determinants of the cost of credit for project finance debt in Africa
This study investigates the characteristics of project finance transactions and establishes the cost determinants for non-recourse project finance in Africa within the energy, oil and gas, mining and infrastructure sectors. Essentially, this thesis will be investigating what the main cost determinan...
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| Format: | Thesis |
| Language: | English |
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Department of Finance and Tax
2017
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| _version_ | 1867613321242345472 |
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| access_status_str | Open Access |
| author | Hatzilambros, Constantin |
| author2 | Rajaratnam, Kanshukan |
| author_browse | Hatzilambros, Constantin Rajaratnam, Kanshukan |
| author_facet | Rajaratnam, Kanshukan Hatzilambros, Constantin |
| author_sort | Hatzilambros, Constantin |
| collection | Thesis |
| description | This study investigates the characteristics of project finance transactions and establishes the cost determinants for non-recourse project finance in Africa within the energy, oil and gas, mining and infrastructure sectors. Essentially, this thesis will be investigating what the main cost determinants are which lenders use to price the risk in project finance transactions. Project finance risks such as market, operational, sponsor, political / regulatory and environmental risks are investigated. A loan transaction database is used to fit these risks to determine the relevant loan parameters available in the database, employing a regression model is used to obtain which loan parameters, and, in turn, risks, lenders price into the cost of the loans. The database represents non-recourse project finance transactions throughout Africa from 1995 to 2015 and was filtered down 89 loan entries that contained the most important loan parameters. Empirical results suggest that secured loans are priced in a different category to unsecured loans, increasing the All-In credit-spread by 196.94 bps (P-value < 0.1%) if the loan parameter is moved from an unsecured to a secured loan. Political / regulatory risk, which had a 27.697 bps increase in the All-in Credit-spread (P-value < 2.3%). This can be attributed to being a result of a country's risk ranking, which was found to be the most significant pricing determinant for non-recourse loans on the African continent. |
| format | Thesis |
| id | oai:open.uct.ac.za:11427/22839 |
| institution | University of Cape Town (South Africa) |
| language | eng |
| last_indexed | 2026-06-10T12:34:14.045Z |
| license_str | Not specified — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from UCTD — University of Cape Town Open Access Repository |
| publishDate | 2017 |
| publishDateRange | 2017 |
| publishDateSort | 2017 |
| publisher | Department of Finance and Tax |
| publisherStr | Department of Finance and Tax |
| record_format | dspace |
| source_str | UCTD — University of Cape Town Open Access Repository |
| spelling | oai:open.uct.ac.za:11427/22839 Determinants of the cost of credit for project finance debt in Africa Hatzilambros, Constantin Rajaratnam, Kanshukan Financial Management This study investigates the characteristics of project finance transactions and establishes the cost determinants for non-recourse project finance in Africa within the energy, oil and gas, mining and infrastructure sectors. Essentially, this thesis will be investigating what the main cost determinants are which lenders use to price the risk in project finance transactions. Project finance risks such as market, operational, sponsor, political / regulatory and environmental risks are investigated. A loan transaction database is used to fit these risks to determine the relevant loan parameters available in the database, employing a regression model is used to obtain which loan parameters, and, in turn, risks, lenders price into the cost of the loans. The database represents non-recourse project finance transactions throughout Africa from 1995 to 2015 and was filtered down 89 loan entries that contained the most important loan parameters. Empirical results suggest that secured loans are priced in a different category to unsecured loans, increasing the All-In credit-spread by 196.94 bps (P-value < 0.1%) if the loan parameter is moved from an unsecured to a secured loan. Political / regulatory risk, which had a 27.697 bps increase in the All-in Credit-spread (P-value < 2.3%). This can be attributed to being a result of a country's risk ranking, which was found to be the most significant pricing determinant for non-recourse loans on the African continent. 2017-01-19T12:30:45Z 2017-01-19T12:30:45Z 2016 Master Thesis Masters MCom http://hdl.handle.net/11427/22839 eng application/pdf Department of Finance and Tax Faculty of Commerce University of Cape Town |
| spellingShingle | Financial Management Hatzilambros, Constantin Determinants of the cost of credit for project finance debt in Africa |
| thesis_degree_str | Master's |
| title | Determinants of the cost of credit for project finance debt in Africa |
| title_full | Determinants of the cost of credit for project finance debt in Africa |
| title_fullStr | Determinants of the cost of credit for project finance debt in Africa |
| title_full_unstemmed | Determinants of the cost of credit for project finance debt in Africa |
| title_short | Determinants of the cost of credit for project finance debt in Africa |
| title_sort | determinants of the cost of credit for project finance debt in africa |
| topic | Financial Management |
| url | http://hdl.handle.net/11427/22839 |
| work_keys_str_mv | AT hatzilambrosconstantin determinantsofthecostofcreditforprojectfinancedebtinafrica |