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  • Case Study 8 Calpine Corporation: The Evolution From Project To Corporate Finance

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    Sudipta Chatterjee
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    Calpine Corporation financed power generation projects using both project and corporate finance structures. The case study assignments ask students to: 1) Demonstrate how project finance reduced under-investment due to leverage; 2) Identify profit opportunities in the US power industry that justified Calpine's projects; 3) Discuss the advantages and disadvantages of project versus corporate finance for Calpine; 4) Characterize a new hybrid structure combining elements of both; and 5) Consider how financial institutions can lead credit markets with innovative structures supporting evolving client needs.

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    Calpine Corporation financed power generation projects using both project and corporate finance structures. The case study assignments ask students to: 1) Demonstrate how project finance reduced under-investment due to leverage; 2) Identify profit opportunities in the US power industry that justified Calpine's projects; 3) Discuss the advantages and disadvantages of project versus corporate finance for Calpine; 4) Characterize a new hybrid structure combining elements of both; and 5) Consider how financial institutions can lead credit markets with innovative structures supporting evolving client needs.

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    © All Rights Reserved
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    14 views1 page

    Case Study 8 Calpine Corporation: The Evolution From Project To Corporate Finance

    Uploaded by

    Sudipta Chatterjee
    Calpine Corporation financed power generation projects using both project and corporate finance structures. The case study assignments ask students to: 1) Demonstrate how project finance reduced under-investment due to leverage; 2) Identify profit opportunities in the US power industry that justified Calpine's projects; 3) Discuss the advantages and disadvantages of project versus corporate finance for Calpine; 4) Characterize a new hybrid structure combining elements of both; and 5) Consider how financial institutions can lead credit markets with innovative structures supporting evolving client needs.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    Case Study 8

    Calpine Corporation: The Evolution from Project


    to Corporate Finance

    Case Study Assignments


    1. Demonstrate in this particular case how project finance can reduce can reduce the
    opportunity costs associated with leverage induced under-investment in positive net
    present value projects.
    2. What kind of profit opportunities in the US power industry justified the development
    of Calpines project?
    3. Which are the chief advantages and disadvantages to use project finance instead
    corporate finance in case of Calpines project?
    4. Which are the characteristics of the new hybrid financing structure proposed in this
    case that incorporates elements of both project and corporate finance in an attempt to
    solve disadvantages associated with each structure?
    5. How a financial institution can lead the credit markets by developing an innovative
    financial structure to support a clients evolving financial need?

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