4:51 k WEEK 5 - 7 PROJECT 2 INT 135G .pdf Case Study. WEEK STO WEEK 7: Trade Finance and Risk (1956) Risk and opportunity together as always! Engineering Tech ET) a large national green parteneri hertinen large-scale arture projects, including publicate PPP) prediving govement departments and agencies ET has been moyennes of strie and has venture into consulting activities in Japan Joris of Alia A senior partner of the fm was approached recently about evectigarrastructure projet in Addis Ababa, Ethiopia near the Bole Rodaport. The country that was referred to ste Breadtaket of Africa and remains the only on the content colored has experienced war, drought and starvation and continues to facere poverty Thou anh realise the country has beretted from some foreign and some intent and the partner Engineering Techperves opportunity to go as well as to on a complicated, prolatile project in region considered toy by the firm's.com Engineering Tech has an excellent relationship we EFIC. As Export Pinance and Insurance Corporation. The national export credit agency Down Underwered by many as a very progressive dynamic d evive portreten wil op to the to promote the cost of Australian experts-even taking insignificant and bankroto do to when ward While the several parts Engineering Technique and willing to me to put a bid together, the company Board is concerned how the form succeed in a country that acesso many challenges? How they wonder wil Engineering Tech protects and ensure excellent resurs na place where to language. Annare, spoken tonere sein The challenge Several partners of Engineering Techs have been a Gana and Kenya but none have traveled to Ethiopia, and previous projects and so onesto share both the project execution and the risks. This time, Engineering Tech se read executing firm under a World Bank development program facilitated partially though the World BankIFC remational Finance Corporation Trade France Program Engineering Techwill be the prime contractor and must decally provision for the The parte supporting involvement in the now now neng Tech "Acacia Crew about there the ones webside of the engaged you to detty some and the mitigation to you have been able time some preliminary nisks to consider and must now presentaties management options The Risks A complex infrastructure engineerng project in LDC (as Developed Country woment case in Ethiopian 1974), trough to the risk of outright propriation of the compiled project I ownerships where than wth the government of the day, pory In the event thula project is only partially funded through developmartmoned to the project may not be usable to secure financing due to the market is the mes Shortage of resources, staff and materiale giant tercant cost overruns, questionable business practices and outcom can eruptions of violence have caused by political net Envronmental impact concerns are increasing clos and any government agency which might be onged to supportin ning EFIC - committed to conduct environs. This includes assessment of impact on loc standard 4:51 WEEK 5 - 7 PROJECT 2 INT 135G .pdf that a project is only partially funded through development montes, se associated to the project may not be usable to secure financing, due to the market risk to hose assets Shortage of resoures, and materials can be significant delays and generate significant col overrunsquestionable business practices and our comption can be asso can eruptions of violence have caused by political rest Environmental impact concerns are increasingly critical projects of this type and any government agency which might be engaged to support in this project - Induding EFIC-has committed to consud environmental impadronach funded. This indudes sement of impact on local population. The Wond Burked astered to sustainability and encronmental Nongovernment artis 100%) actively Mis one, and Engineering Tech andere bedre Even in the ideal station, there remains the risk of disagreement between Engineering Tech and the funding agencies including the World Bank and the FC. Such disagreements com eccur and can be time-consuming to resolve Projects funded through muito rubiecte significant due diligence and verification - even potential stringent audit processes all of which plyn and added cost both net new cool and cost of funds on yed payments) to Engineering Tech Your general impression after having studied the proposed project is that may every business risk maginables represented to some degree in the sportunity Risk Mitigation Considerations The Acacia Crew are experienced consultants and engineers with sin numerous high risk markets and understand that inevitably thing wrong but some foresight coupled with effective planning wil macimize the hood of a costul come The Engineering Tech Board members are some less Schooled in theatre of developing projects and will require comprehensive assessments and significant reassurance Your assessment indicate that this opportunity is primarily about risk management and ensuring adequate financing and cash flow over the form of the project Engineering Tech and the Board must take a holistic view of the station and determine whether they have come to the necessary risk mitigation tools, and whether the firm has the financial where to see the project through Case Study Discussion Questions pily with potential project? What are some studio expired spoustiek ngon lutions in the producho 2. Do any of the cadenance productory condich sisaret ildsplan for productes could be nice The risks inced that to be wary broad and Engineering Tech effectively protect the interese part and the completed pro Indude mention of trade finance product that you would recommendation to mi The members of the Board of Director of Engineering Techwed the developing markets and therefore will comprennents and grant munce How can the Acacia Crashegohet Eng Tech support of pursuing this project prohie Bondone at the can be compared toy and house Case Study Discussion Questions: 1. How can Engineering Tech organize an approach around risk mitigation with so many risk factors at play with this potential project? What are some of the resources and techniques that can be explored as possible risk mitigation solutions in the context of a project such as this one? 2. Do any of the basic trade finance products or services apply in complex and high-risk scenarios such as this one? List and explain at least three products that could be used in this scenario. 3. The risks involved in this project seem to be very broad and encompassing. How can Engineering Tech effectively protect its interests, assure payment and ensure the project is completed profitably? Include mention of trade finance products that you would recommend in this situation to mitigate their risks. 4. The members of the Board of Directors of Engineering Tech are less educated in the nature of developing markets and therefore will require comprehensive assessments and significant reassurance. How can the "Acacia Crew" (the partners at Engineering Tech that are in support of pursuing this project) present this project to the Board of Directors to assure them that the project can be completed successfully and should be pursued