Project Finance Jobs Career Roles Salaries Tips

Project Finance Careers & Jobs

Project finance can be broadly defined as long-term financing projects such as infrastructure, power and plant, and other industrial projects. Today, the role of finance professionals is mounting beyond the traditional accounting and reporting functions. They are taking the part of leadership to promote efficiency and improve an organization’s performance. And these jobs stand out in finance by advising, analyzing, and financing various industrial projects. The positions range from an analyst to project director, but all these jobs involve the long-term financing Long-term FinancingLong term financing means financing by loan or borrowing for a term of more than one year by way of issuing equity shares, by the form of debt financing, by long term loans, leases or bonds, done for usually extensive projects financing and expansion of the company.read more of infrastructure projects or industrial projects.

Project finance will be interesting to those who enjoy traveling, advising clients on financial decisions, and analyzing and projecting financial statements. This article aims to provide you with brief details about the project finance jobs. And how does it differ from the various other positions in finance?

In this article, I will cover the following points on Project Finance careers: –

Project Finance Jobs Streams

There are two main streams in project finance jobs, i.e., advisory and lending. For example, Project Finance Group advises clients and/or lends funds for the debt used in huge investments.

Advisory

In this kind of job, the professionals advise the clients on the funds used in the huge investment. Below are the activities conducted by the Project Finance Advisor: –

If you are appointed to a Project Finance Group as an advisor, your main task will be to handle the clients.If you see, the basic element for every client is to gather the funding/financial goals for their project, so as an advisor, you will guide the clients on how to arrange to collect the funds by providing them with debt funding sources and prioritizing the important element.As for clients, the ideal situation is to get maximized debt, load, quick financial close, and low debt pricing. So as a Project Finance Advisor, your duty will be to make intensive modeling of the client’s project, carry out the due diligence of projects including pre-bid advisory, estimate the cash flows of the project, and collect marketing materials such as information memorandum and prepare the structure of the funding to meet the specific requirement of the project.After designing and finalizing the deal structure, as an advisor, you will reach out to the banking markets or financial institutionsFinancial InstitutionsFinancial institutions refer to those organizations which provide business services and products related to financial or monetary transactions to their clients. Some of these are banks, NBFCs, investment companies, brokerage firms, insurance companies and trust corporations. read more to raise the required finance for the client’s project.

Debt Syndication

Debt syndication refers to selling loans to other banks or financial institutions. Below mentioned are the activities of a debt syndication job in project finance: –

As project financing is required for the large project size, multiple banks find it ideal to fund together for a single project.Suppose you work under the main bank’s project syndication or debt syndication team. In that case, you will be playing the role of an intermediate between the client and the other financial institutions.As an intermediate, you will finalize the structure and get loan sanctions from all the leading agencies involved in the transactions.Under the debt syndication team, you will also be required to interact with numerous banking and financial institutions and negotiate the terms of loan sanctions to best suit the client’s requirements.

Project Finance Job Roles

Numerous jobs generally range from an Analyst to a project and infrastructure Finance Director position. These jobs involve infrastructure financing and various industrial projects financing over a long period. Project finance jobs want a professional in this field who plans long-term cash flow rather than just analyzing and balancing the income statementIncome StatementThe income statement is one of the company’s financial reports that summarizes all of the company’s revenues and expenses over time in order to determine the company’s profit or loss and measure its business activity over time based on user requirements.read more and balance sheets of those corporates financing the projects. The following are the description of different positions in project finance: –

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Director:

Directors visualize the failure or success of the project before preparing the project’s financial structureFinancial StructureThe financial structure refers to the sources of capital and the proportion of financing that comes from short term liabilities, short term debt, long term debt, and equity to fund the company’s long term and short term working capital requirements.read more. To become a director of a project finance company, you need to possess the following skills: –

You should have experience of 10 years – 12 years working with financial statementsFinancial StatementsFinancial statements are written reports prepared by a company’s management to present the company’s financial affairs over a given period (quarter, six monthly or yearly). These statements, which include the Balance Sheet, Income Statement, Cash Flows, and Shareholders Equity Statement, must be prepared in accordance with prescribed and standardized accounting standards to ensure uniformity in reporting at all levels.read more, financial analysis, and debt flow.It would help if you had an analytical mind to understand the varied range of factors that may influence the success of a project.You should also have experience in marketing research and sales to understand the factors affecting the project’s earnings.You will require sharpened leadership skills to lead a project finance team.

Managers:

The project finance manager is the one who is capable enough to lead a team. To work as a manager in the project finance team, you will require to possess the following skills: –

You need to have experience of 3 years-5 years working as an analyst, making an intensive modeling structure of a company.You will be required to undertake all the necessary activities, i.e., collecting the information, preparing the projection model, finalizing the design, etc., to meet the clients’ funding financial requirements or funding needs.You will need to coordinate with banks, financial institutions, private equity funds, rating agencies, and other participants in the financial community to ensure the timely accessibility of finance for the project. And also coordinate with the finance providers on due diligence, term sheet negotiations, and documentation.You will work with a project development team to identify, analyze and execute the most optimum financing solutions for projects.

Analyst:

This job involves assisting seniors and preparing reports. If you are planning to get this job as an analyst, you must possess: –

It would be best if you had an MBA degree in Finance from a top management institution.Your job will be to assist the directors and set up various contracts.As an analyst, you should make digital reports on projected earnings, risk, and cash flow.You need to possess management skills to manage teams, client meetings, and contract negotiations.You are required to retain the skills of effective communication, resource management, and negotiation skills as the responsibility level, scope, and complexity will differ according to the nature of the project.

Skills Required

Between three to five years of professional experience in infrastructure project finance learned primarily within a project finance bank or a corporate house focused on project development/financing.Should know how to screen new projects, define project description and scope, and conduct feasibility studies to determine the financial viability of new ventures projecting cash flow and growth opportunities.Should know to prepare, monitor, and ensure cash flows, fund flows, profitability statements, IRRs, Payback periodsPayback PeriodsThe payback period refers to the time that a project or investment takes to compensate for its total initial cost. In other words, it is the duration an investment or project requires to attain the break-even point.read more, DSCRs, projected profitability, and other financial parameters/reports to analyze inflow/outflow of funds and profits/surplus resulting thereof.Strong knowledge of financial modelingFinancial ModelingFinancial modeling refers to the use of excel-based models to reflect a company’s projected financial performance. Such models represent the financial situation by taking into account risks and future assumptions, which are critical for making significant decisions in the future, such as raising capital or valuing a business, and interpreting their impact.read more, capable of building sophisticated “project finance” economic models from scratch.Coordination with banks, financial institutions, and consultants to arrange syndication and raise funds from various financial institutions/banks/lease finance companies.Knowledge of project financeProject FinanceProject Finance is long-term debt finance offered for large infrastructure projects depending upon their projected cash flows. Moreover, an investor has to form a Special Purpose Vehicle (SPV) to acquire the same. read more documentation and experience handling financial closing work either as a project developer or a lender.Knows how to compile and prepare cost and performance reports as per Cost Accounting Records Rule (CARR), cost-benefit analysis Cost-benefit AnalysisCost-benefit analysis is the technique used by the companies to arrive at a critical decision after working out the potential returns of a particular action and considering its overall costs. Some of these models include Net Present Value, Benefit-Cost Ratio etc.read more, and critical analysis of cost reports; recommending necessary corrective actions, and conducting financial research of similar companies and/or projects for benchmarking ratios and performance tracking.Should be a Chartered Accountant (C.A.) / Certified Public Accountant (CPA) / MBA (Finance) and needs to know the areas of project proposals, project finance management, and all the financial accountabilities related to multiple projects.

Responsibilities in Project Finance Jobs

To make inclusive financial models for several projects to deliver cash flow forecast, scenario analysis, risk assessment, and return analysis.Individuals have to work closely with the project development team to identify, analyze and execute the most optimum financing solution for projects which include debt and equity.Individuals must coordinate debt facilities’ drawdownDrawdownA drawdown is defined as the percentage of decline in the value of a security over a period before it bounces back to the original value or beyond. It is expressed as the difference between the highest, i.e., the peak value of that asset, and the lowest, i.e., the trough value of the same.read more/repayment formalities and monitor compliance with financing conditions and obligations.Individuals must coordinate due diligence, term sheetTerm SheetA term sheet is an agreement facilitating a fundraising process whereby two parties mutually agree to abide by the mentioned clauses concerning the investment.read more negotiations, and documentation with finance providers.Coordinate with banks, financial institutions, and consultants to arrange syndication and raise funds from various financial institutions/banks/lease finance companies.To evaluate capital investmentEvaluate Capital InvestmentCapital Investment refers to any investments made into the business with the objective of enhancing the operations. It could be long term acquisition by the business such as real estates, machinery, industries, etc.read more proposals and calculate project/dividend IRRs, DSCRs, sensitivity analysis, etc.To compile and prepare cost and performance reports as per cost accountingCost AccountingCost accounting is a defined stream of managerial accounting used for ascertaining the overall cost of production. It measures, records and analyzes both fixed and variable costs for this purpose.read more Records Rule (CARR), cost-benefit analysis, and critical analysis of cost reports, recommending necessary corrective actions.Investigate historical dealings to categorize pricing, debt levels, trends, and greatest practice. It also has to conduct a financial analysisFinancial AnalysisFinancial analysis is an analysis of finance-related projects/activities, company’s financial statements (balance sheet, income statement, and notes to accounts) or financial ratios to evaluate the company’s results, performance, and trends, which is useful for making significant decisions such as investment, project planning and financing activities.read more of similar companies and/or projects for benchmarking ratios and performance tracking.

Salaries of Project Finance Professionals

Project Finance Jobs are still in high demand. The salaries of project finance professionals differ as per the position, role, and years of experience. However, still, these are highly paid careers compared to other areas in finance. The following table will give you the details of the salaries of project finance professionals: –

The survey found that at large investment banks, some senior project finance professionals earn basic salaries of $200,000. But, in addition, many people had attained bonuses getting seven figures. And also, in the energy sector project, Finance Directors earn a median salary of $100,000, with a bounty of typically 100%. Even at the Assistant Director level, salaries are $70,000 and an average bonus of 80%. The graph below shows the range of salaries offered to the project finance manager.

Source: indeed.com

Companies Offering Project Finance Jobs

Many companies offer these jobs as this field is still in great demand today. Various infrastructure companies, energy, and power companies, large investment banks, steel companies, oil and gas companies, etc., require a comparatively huge amount of funds for their projects compared to other sectors or companies. Therefore, they are looking forward to projecting finance professionals.

The following is the list of companies that offer project finance jobs. They are: –

China State Construction & EngineeringChevron CorporationSaudi AramcoRoyal Dutch ShellMatson Navigation CompanyCrowley Maritime CorporationRoyal Bam GroupJacobs EngineeringGoldman SachsLarsen & ToubroMarathon Petroleum CorporationReliance Industries Ltd.Exelon CorporationAnglo American PlatinumGoldcorp

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