Project Finance

in Architecture
The link between project finance, project Omidiora Bibitayo EDMP19/20/H/1705
management, investment and investment Samson Olanrewaju EDMP19/20/H/1179
portfolio Ojo Temiloluwa EDMP19/20/H/1183
Semowo Ayokunle EDMP19/20/H/1184
Group 5
Table of Contents

01 02 03 04

PROJECT PROJECT INVESTMENT INVESTMENT

FINANCE MANAGEMENT PORTFOLIO
 1 2 3
OVERVIEW
Project finance, project management, investment, and investment
portfolio are interconnected concepts that are important in the field of
business and finance.

Project finance and project management are critical components in the

development and execution of large-scale infrastructure projects, while
investment and investment portfolio management are important in the
allocation of capital to various assets with the aim of generating returns.
All four concepts are interconnected, as investments made in project
finance can be included in an investment portfolio and managed using
project management principles.
Project Finance

Project finance is the funding (financing) of long-term

infrastructure, industrial projects, and public services using a non-
recourse or limited recourse financial structure which relies only on
the project cash flow for debt repayment, with the projects assets
held as a collateral.
 Project Finance

Project finance involves the public funding of

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The project has to generate sufficient cash flows to cover

debt repayments and dividends after covering operating
expenses and capital expenditure
Project Management

Project management is the practice of planning, organizing, and

executing projects effectively and efficiently to achieve specific
goals and objectives. It involves coordinating and directing
resources, including people, time, and budget, to complete tasks
within established deadlines and budgets.
 Project Management

The primary goal of project management in architecture

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is to ensure
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requirements are met. The project manager must also
manage the project's financial performance, including
tracking costs and managing cash flow.
Investment

An investment is an asset or item acquired with the goal of

generating income or appreciation. An investment always
concerns the outlay of some resource today—time, effort, money,
or an asset—in hopes of a greater payoff in the future than what
was originally put in.
 Key Notes on Investment

An investment involves putting capital to use today in

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Investments can be diversified to reduce risk, though this

may reduce the amount of earning potential
Investment Portfolio

An investment portfolio is a set of financial assets owned by an

investor that may include bonds, stocks, currencies, cash and cash
equivalents, and commodities. Further, it refers to a group of
investments that an investor uses in order to earn a profit while
making sure that capital or assets are preserved.
Features of an Investment Portfolio

The assets that are included in an investment portfolio are

called asset classes. The investor or financial advisor
needs to make sure that there is a good mix of assets in
order that balance is maintained, which helps foster
capital growth with limited or controlled risk.

Components of an investment portfolio:

1. Stocks
2. Bonds
3. Alternative Investments
THE LINK

Establishing the relationship

Project finance, project management, investment, and investment
portfolio are interconnected concepts that are important in the
field of business and finance, and as a result, architecture.
Establishing the relationship

Establishing the relationship

Project finance typically Investment is the act of

involves a consortium of lenders
who provide funding to the F I allocating capital to assets
with the exp ecta tion of
project on a non-recourse basis generating income or profit.

Project management, on the An investment portfolio is

other hand, involves the M I.P a collection of investments
planning, execution, and held by an individual or an
monito r i n g o f a p r o j e c t t o institution
achieve specific
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objectives.
Project finance and Project Management
Relationship

Planning
Prototype
Both project finance and project management involve extensive planning to ensure the
project's success. In project finance, this may include creating financial models and assessing
risks, while project management may involve developing a detailed project plan and
outlining project timelines.
Budgeting
Share Get feedback
Both fields require effective budgeting to ensure the project's financial success. Project
finance focuses on securing financing and allocating funds appropriately, while project
management focuses on developing a budget and ensuring that the project is completed
within budget.
Project finance and Project Management
Relationship

Risk management
Prototype
Both project finance and project management involve assessing and managing risks. In
project finance, risks may include market risks or financial risks, while project management
risks may include delays, budget overruns, or unexpected challenges.

Stakeholder
Share management Get feedback
Both fields require effective stakeholder management to ensure project success. In project
finance, stakeholders may include lenders, investors, and project sponsors, while project
management stakeholders may include team members, clients, and other project stakeholders.
Project finance and Investments
Relationship

Risk Assessment
Prototype
Both project finance and investments require a thorough analysis of the potential risks
involved before committing resources.

Financial Analysis
Both project finance and investments involve financial analysis to determine the potential
Shareon investment.
return Get feedback

Asset Valuation
Both project finance and investments require an assessment of the value of assets involved in
the project or investment.
Project finance and Investments
Relationship

Prototype
Return on Investment:
Both project finance and investments are expected to generate a return on investment,
whether through cash flows or asset appreciation.

Share
Long-term perspective Get feedback
Both project finance and investments typically have a long-term perspective, with the goal of
creating sustainable value over time.
Project finance and Investment portfolio
Relationship

Risk management
Prototype
Both project finance and investment portfolio management involve managing risk. In project
finance, the risk is related to the specific project being financed, while in investment portfolio
management, the risk is related to the overall portfolio of investments.

Financial Analysis
Share Get feedback
Both project finance and investment portfolio management require financial analysis. In
project finance, this analysis is focused on the viability of the project and its ability to
generate cash flow. In investment portfolio management, the analysis is focused on the
financial health and performance of individual investments within the portfolio.
Project finance and Investment portfolio
Relationship

Goal orientation
Prototype
Both project finance and investment portfolio management have specific goals. In project
finance, the goal is typically to finance a specific project and generate a return on
investment. In investment portfolio management, the goal is typically to generate a return on
investment for the overall portfolio.

Use of financial tools:

Share Get feedback
Both project finance and investment portfolio management utilize a variety of financial tools,
such as financial models, risk assessments, and valuation techniques, to make informed
decisions and manage risk.
Investment and Project finance
Relationship

Goal of generating a return

Prototype
Both investment and project finance have the goal of generating a return on investment.
Investors in both types of financing expect to earn a profit or return on their investment.
Allocation of funds
Both investment and project finance involve the allocation of funds. In investment, funds are
allocated to different assets such as stocks, bonds, or real estate. In project finance, funds are
Share Get feedback
allocated to specific projects.
Risk management
Both investment and project finance involve managing risks. Investors in both types of
financing need to analyze risks and take measures to mitigate them.
Investment and Project finance
Relationship

Time horizon
Prototype
Both investment and project finance involve a time horizon. Investors in both types of
financing need to consider the time horizon of their investment, such as short-term or long-
term.

Financial
Share analysis Get feedback
Both investment and project finance involve financial analysis. Investors need to analyze the
financial performance and prospects of the assets or projects they invest in.
Investment and Project Management
Relationship

Investment decision-making
Prototype
Investment decisions are based on the potential returns and risks associated with a project.
Project management provides valuable information about the estimated costs, timelines, and
risks of a project, which helps investors to make informed investment decisions.

Resource
Share allocation
Both investment and project management involve the allocation of resources, including time,
money, and personnel. Effective project management ensures that resources are used
efficiently and effectively, which helps to maximize the return on investment.
Investment and Project Management
Relationship

Risk management
Prototype
Both investment and project management require effective risk management. In investment,
investors need to assess the risks associated with a project before committing funds. In project
management, project managers need to identify, assess, and manage the risks associated
with a project to minimize the potential negative impacts on the project's outcome.

Performance
Share monitoring
Investment and project management both involve performance monitoring. Investors need to
monitor the performance of the project to ensure that they receive the expected returns on
investment. Project managers need to monitor project progress to identify potential issues
and take corrective actions.
Investment and Investment Portfolio
Relationship

Investment refers to the act of committing money or capital to an endeavor with the
Prototypeof obtaining an additional income or profit in the future. An investment portfolio,
expectation
on the other hand, is a collection of different investments that an individual or an entity owns.

In other words, an investment portfolio is the combination of various investments such as stocks,
bonds, real estate, mutual funds, exchange-traded funds (ETFs), and other investment vehicles.
The purpose of having an investment portfolio is to diversify the risk and maximize returns.
Share
Investors usually invest in multiple assets to spread their risk and ensure that they do not lose
all their money if one investment performs poorly. An investment portfolio allows an investor
to have a diversified portfolio that includes different types of investments and provides
exposure to a variety of sectors, regions, and industries.
Investment Portfolio and Investment
Relationship

1. Both involve the allocation of financial resources: Both investment and investment portfolio
Prototype
involve allocating financial resources towards assets that are expected to generate a return.

2. Both require careful consideration:

3. Both require monitoring and management:

Share Get feedback
4. Both involve risk:

5. Both can generate income and appreciate in value:

Investment Portfolio and Project Finance
Relationship

Risk management
Prototype
Both investment portfolio management and project finance involve risk management. In
investment portfolio management, diversification, asset allocation, and risk assessment are
used to manage risk. In project finance, risk management techniques such as insurance,
guarantees, and contingency planning are employed to mitigate project-specific risks

Return
Share on investment Get feedback
Both investment portfolio management and project finance are concerned with achieving a
return on investment. In investment portfolio management, the return on individual investments
is assessed to determine the overall performance of the portfolio. In project finance, the
return on the project is evaluated to determine whether it is financially viable.
Investment Portfolio and Project Finance
Relationship

Long-term perspective
Prototype
Investment portfolio management and project finance both involve a long-term perspective.
Investors in both cases are typically looking for returns over the long-term, rather than short-
term gains.

Asset allocation
Share Get feedback
Asset allocation is an important aspect of investment portfolio management, and it can also
be relevant in project finance. In project finance, capital is allocated to specific assets or
projects, and investors may have different asset allocation strategies for different
types of projects.
Investment Portfolio and project management
Relationship

Project selection
Investment
Prototype portfolio managers need to select projects that align with their investment
objectives and risk tolerance. Project managers can help provide information on the
feasibility and risk of various projects, which can inform the investment decision-making
process.

Project monitoring
Share Get feedback
Investment portfolio managers need to monitor the progress of projects in their portfolio to
ensure that they are on track and delivering the expected results. Project managers can
provide regular updates on project status and highlight any issues that may impact the
investment portfolio.
Investment Portfolio and project management
Relationship

Risk management
Prototype
Both investment portfolio management and project management involve managing risk.
Project managers can help identify and mitigate project risks, which can help reduce the
overall risk of the investment portfolio.

Performance measurement
Share Get feedback
Investment portfolio managers need to measure the performance of projects in their portfolio
to determine whether they are meeting their objectives. Project managers can help provide
data on project performance, which can inform investment portfolio reporting and decision-
making.
Project management and Project Finance
Relationship

Project Planning and Budgeting

Prototype
Project management involves developing a comprehensive project plan that outlines tasks,
timelines, and resource requirements. Project finance plays a crucial role in this phase by
determining the budget needed to execute the project successfully.

Resource Allocation
Share Get feedback
Project management requires allocating resources effectively to ensure tasks are completed
within budget and on time. Project finance helps in identifying and securing the necessary
funds to acquire resources, such as personnel, equipment, or materials, based on the project's
financial plan.
Project management and Project Finance
Relationship

Risk Assessment and Mitigation

Prototype
Both project management and project finance involve assessing risks and implementing
strategies to mitigate them. Project managers identify potential risks and develop
contingency plans, while project financiers evaluate financial risks associated with the project,
such as market volatility, cost overruns, or funding availability.
Cost Control and Monitoring
Share Get feedback
Project management and project finance work together to monitor and control costs
throughout the project lifecycle. Project managers track expenses, monitor budget utilization,
and ensure adherence to financial plans. Project financiers oversee financial performance,
analyze variances, and make adjustments as required to maintain financial viability.
Project management and Investments
Relationship

Investment Decision-making
Project management is involved in the decision-making process related to investments. Before
Prototype
committing funds to a project, investors typically assess the feasibility, potential risks, and
expected returns. Project management techniques, such as cost-benefit analysis, risk
assessment, and project planning, help investors evaluate the viability and profitability of
investment opportunities.
Project
Share Planning and Execution Get feedback
Once an investment decision is made, project management methodologies and tools come
into play. Project managers create detailed project plans, define objectives, set timelines,
allocate resources, and establish milestones. Effective project management ensures that
investments are executed efficiently, with clear objectives, well-defined tasks, and a
structured approach to achieving desired outcomes.
Project management and Investments
Relationship

Resource Allocation
Prototyperequire the allocation of financial, human, and other resources. Project
Investments
management techniques help in optimizing resource allocation by identifying the necessary
resources, estimating their costs, and ensuring their availability throughout the project
lifecycle.
Risk Management
Share
Investments inherently involve risks, such as market volatility, regulatory Get feedback
changes, technical
challenges, or project delays. Project management incorporates risk management practices to
identify, assess, and mitigate these risks. By actively managing risks, project managers can
minimize potential negative impacts on investments, increase the likelihood of success, and
protect the investors' interests.
Project management and Investment Portfolio
Relationship

Project Selection
Prototype
Investment portfolio management involves making strategic decisions about which projects or
investments to undertake to achieve specific financial goals. Project management plays a
crucial role in providing the necessary information and analysis to evaluate potential projects
and assess their feasibility, risks, and potential returns.

Share
Resource Allocation Get feedback
Effective portfolio management requires efficient allocation of resources across different
investment opportunities. Project management helps in this process by providing detailed
project plans, resource requirements, and timelines.
Project management and Investment Portfolio
Relationship

Risk Management
Both project management and investment portfolio management involve assessing and
Prototype
managing risks. Project managers identify and analyze project-specific risks, develop risk
mitigation strategies, and monitor risk throughout project execution. Portfolio managers, on
the other hand, assess risks associated with the entire investment portfolio, including market
risks, industry risks, and systemic risks.
Decision-making
Share
and Prioritization Get feedback
Project management and investment portfolio management both require effective decision-
making and prioritization. Project managers make decisions regarding project sequencing,
resource allocation, and trade-offs to ensure project success. Portfolio managers make
decisions about investment selection, portfolio diversification, asset allocation, and risk
management.
Thank you!