PwC-GRID

PricewaterhouseCoopers(PwC)
World's second-largest professional services firm.
It had total revenues of $26.6 billion in 2010
More than 161,000 people in 154 countries in firms
across the PwC network .In India, PwC has nearly 4,000
professionals
 PwC India Provides services in Consulting, Deals,
Forensic Services, Government Reforms and
Infrastructure Development (GRID),IFRS Reporting,
Internal Audit Advisory Services, Sustainability, Tax and
Regulatory Services
Government Reforms and Infrastructure
Development (GRID)
One of the fastest growing sectors in PwC.
Biggest advisory services targeted at the government
sector.
GRID practice contributed a revenue of Rs63 crore in
fiscal 2010.
 In the current year, it is projected to generate a revenue
of around Rs77 crore, which is about one-fourth of the
total projected revenue of PwC’s advisory practice.
Government Reforms and Infrastructure
Development (GRID)-Market
The government market is targeted at five levels:
- International multilateral/ bilateral organisations &
funding agencies
- National/central government departments or ministries
- Regional/state governments
- Local/municipal governments
- Quasi-government bodies
Government Reforms and Infrastructure
Development (GRID)-Practices
Energy & Utilities (Power, Oil and Gas)
Infrastructure (Urban Infrastructure, Transport
Infrastructure and Industrial Clusters)
Social Sector (Health, Education, and Livelihoods)
State Level Governance Reforms and Public Finance
Public Sector Restructuring and Reforms
Government Reforms and Infrastructure
Development (GRID)-Services
Policy Development
Performance Improvement
Institutional Strengthening and Capacity Building
Accounting and Financial Management Systems
Human Resource Development
Change Management and Organization Development
Public-Private-Partnerships
Regulatory Reform
Feasibility Studies
 Summer Project-Objective
To find optimal balance of risk and revenue share among
all project participants
To understand how Model Concession Agreement
(MCA) will help in speedy allocation of project.
Project Structuring and Risk Allocation in Project
Finance
 Project Structuring
Defining Overall Project Boundary or Scope
–Asset parameters
–Service parameters
–Payoff parameters
Detailing the boundary for each stakeholder in the project
To achieve the project objectives by defining the following
for each stakeholder-
–Accountability
–Payoffs
–Risks
Basic element of Infrastructure
Financing
 Risk Allocation in Project Finance
Financial Engineering and Structuring must be done at
the beginning of project
Lenders, Terms of Loan (Tenors and Rates of Interest),
mix of debt and equity, and user charges can all be
modelled to determine the financial viability of the
project.
Projects have two types of risk-
–Exogenous risks
–Endogenous risks
 Principles of Risk Allocation
Endogenous risks should be borne by the stakeholder,
which is in best position to control and mitigate those
risks.
Exogenous risks should be borne by those who can most
efficiently bear it, typically
–Insurance
 Risk Mitigation Tools
Capital Markets
–Insurance
–Bonds
Contracts
–Legally enforceable agreement
Self enforcing agreements
– Reputation
– Mutual dependence
 Expected Learning
Business plans
Financial Modelling
Market assessment
PPP project structure
Project finance
Thank You