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Simulation-based valuation of project finance investments in sub-Saharan Africa and its effects on net present value and default probabilities
This paper addresses the issue surrounding the valuation of valuing large-scale infrastructure projects located in emerging and frontier market countries. These are economies which, traditionally, have been characterised as having high levels of risk and uncertainty, thus presenting a significant ch...
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| Format: | Thesis |
| Language: | English |
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Research of GSB
2018
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| _version_ | 1867613254077906944 |
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| access_status_str | Open Access |
| author | De Villiers, Johan |
| author2 | Biekpe, Nicholas |
| author_browse | Biekpe, Nicholas De Villiers, Johan |
| author_facet | Biekpe, Nicholas De Villiers, Johan |
| author_sort | De Villiers, Johan |
| collection | Thesis |
| description | This paper addresses the issue surrounding the valuation of valuing large-scale infrastructure projects located in emerging and frontier market countries. These are economies which, traditionally, have been characterised as having high levels of risk and uncertainty, thus presenting a significant challenge to capital allocation decisions and the associated theme of narrowing the finance gap. In light of this, a case study is used to investigate the impact that simulation has on the valuation of an actual infrastructure project located in a sub-Saharan African economy. Specifically, a Monte Carlo simulation-based cash flow model is presented of an investment into a renewable energy project located in South Africa. Results of the simulation process indicate the degree to which certain variables affect the output factors, juxtaposed with an initial base case. A clear need is established for a more sophisticated valuation method in order to accurately judge the investment opportunity and Monte Carlo simulation is presented as a viable solution. |
| format | Thesis |
| id | oai:open.uct.ac.za:11427/28974 |
| institution | University of Cape Town (South Africa) |
| language | eng |
| last_indexed | 2026-06-10T12:33:12.104Z |
| license_str | Not specified — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from UCTD — University of Cape Town Open Access Repository |
| publishDate | 2018 |
| publishDateRange | 2018 |
| publishDateSort | 2018 |
| publisher | Research of GSB |
| publisherStr | Research of GSB |
| record_format | dspace |
| source_str | UCTD — University of Cape Town Open Access Repository |
| spelling | oai:open.uct.ac.za:11427/28974 Simulation-based valuation of project finance investments in sub-Saharan Africa and its effects on net present value and default probabilities De Villiers, Johan Biekpe, Nicholas Development Finance This paper addresses the issue surrounding the valuation of valuing large-scale infrastructure projects located in emerging and frontier market countries. These are economies which, traditionally, have been characterised as having high levels of risk and uncertainty, thus presenting a significant challenge to capital allocation decisions and the associated theme of narrowing the finance gap. In light of this, a case study is used to investigate the impact that simulation has on the valuation of an actual infrastructure project located in a sub-Saharan African economy. Specifically, a Monte Carlo simulation-based cash flow model is presented of an investment into a renewable energy project located in South Africa. Results of the simulation process indicate the degree to which certain variables affect the output factors, juxtaposed with an initial base case. A clear need is established for a more sophisticated valuation method in order to accurately judge the investment opportunity and Monte Carlo simulation is presented as a viable solution. 2018-11-02T09:31:27Z 2018-11-02T09:31:27Z 2015 Master Thesis Masters MCom http://hdl.handle.net/11427/28974 eng application/pdf Research of GSB Faculty of Commerce University of Cape Town |
| spellingShingle | Development Finance De Villiers, Johan Simulation-based valuation of project finance investments in sub-Saharan Africa and its effects on net present value and default probabilities |
| thesis_degree_str | Master's |
| title | Simulation-based valuation of project finance investments in sub-Saharan Africa and its effects on net present value and default probabilities |
| title_full | Simulation-based valuation of project finance investments in sub-Saharan Africa and its effects on net present value and default probabilities |
| title_fullStr | Simulation-based valuation of project finance investments in sub-Saharan Africa and its effects on net present value and default probabilities |
| title_full_unstemmed | Simulation-based valuation of project finance investments in sub-Saharan Africa and its effects on net present value and default probabilities |
| title_short | Simulation-based valuation of project finance investments in sub-Saharan Africa and its effects on net present value and default probabilities |
| title_sort | simulation based valuation of project finance investments in sub saharan africa and its effects on net present value and default probabilities |
| topic | Development Finance |
| url | http://hdl.handle.net/11427/28974 |
| work_keys_str_mv | AT devilliersjohan simulationbasedvaluationofprojectfinanceinvestmentsinsubsaharanafricaanditseffectsonnetpresentvalueanddefaultprobabilities |