project Mozal

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Financing the Mozal Project Table of Content 1 Introduction .................................................................................................................................... 3 2 Project Valuation ............................................................................................................................ 4 2.1 2.2 3 Should Alusaf/Gencor invest in the Mozal Project? ............................................................... 4 What are the greatest risks? Have they been adequately addressed? ...................................... 8 The Role of the IFC ........................................................................................................................ 9 3.1 How does IFC…show more content…
This will then be compared to the project’s internal rate of return. Second, the project’s greatest risks will be identified and evaluated. The second part of this paper addresses the role of the IFC by assessing the impact of their involvement in the deal first. In addition, the project will also be evaluated from the IFC’s point of view. The last part deals with the IFC’s competitive advantage and further evaluates its role as a unique, valuable and sustainable investor. The paper will conclude with a final investment decision. 3 2 2.1 Project Valuation Should Alusaf/Gencor invest in the Mozal Project? In order to evaluate the investment opportunity for Alusaf and Gencor, the international rate of return (IRR) of the Mozal Project needs to be determined. The financial projections given in Exhibit 6 are taken as a basis for this calculation. However, since supplier contracts for electricity and alumina are signed for a 25 year period, it is assumed that the project’s life is equal to 25 years. Therefore, the given financial projections are extended for the period until 2022. Starting with the short-term assets/cash this will continue to be equal to $226 Mio. Total assets are further decreased at a rate of 7.34% which is based on the average total asset growth rate for the period from 2000 to 2012. Fixed assets are calculated as the difference between total assets
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