Project Economics and Risk Analysis Training Course

Duration 5 days 10 modules · 33 contact hours
Level Intermediate Certificate on completion
Who attends Project Finance Managers, Project Managers and others
Fee from USD 1,100 KSh 95,000 for Kenyan organisations
Where 52 cities + online See dates by city
Next start 7 Nov 2026 Course code SD-FM-062

Before you join: Participants should understand basic financial statements, percentage calculations and the purpose of discounted cash flow analysis.

Dates & prices

Two start dates a month in every city, and live online on weekdays or weekends. Fees are per participant; classroom fees include tuition, materials, lunch and refreshments, and the certificate.

Suggest a date or city

Showing the next six months. Later dates, other cities and private deliveries for your team are available on request.

Course overview

Major investment decisions can fail when financial models hide weak assumptions, risks are treated as generic register entries, or decision makers receive a single-point forecast without its range of possible outcomes. Project sponsors need to understand whether expected benefits justify capital, how uncertainty changes value, which risks require treatment, and when additional information or staged funding is worth the cost. These questions arise in infrastructure, energy, technology, public programmes, manufacturing expansions, property developments and service transformation projects.

This course develops the financial and risk-analysis skills required to assess project proposals from first assumptions through investment recommendation. Participants build time-phased cash flow models, calculate NPV, IRR, MIRR, profitability index and equivalent annual annuity, and test assumptions through sensitivity, scenario and break-even analysis. They assess financing effects, model probability distributions, interpret Monte Carlo outputs, quantify contingency needs, and use decision trees, expected value of information and real options to compare choices under uncertainty.

Instructor-led sessions combine concise technical briefings with worked financial cases, model reviews, group analysis and decision simulations. Participants work with realistic project data, including capital expenditure, operating costs, revenues, taxes, working capital, schedule uncertainty, contracts and financing terms. They leave with a reusable project economics workbook structure, an assumption register, a risk-adjusted appraisal framework, decision-tree templates and an investment-case checklist suitable for internal approval processes.

The course is suited to finance professionals, project managers, investment analysts, engineers, procurement specialists and programme leaders who contribute to project approvals or must explain project value and risk to senior stakeholders. It is particularly useful where decisions involve material capital commitments, uncertain demand, long asset lives, contract exposure or phased funding.

What you will be able to do

  • Build time-phased project cash flow models from operational and financial assumptions
  • Calculate NPV, IRR, MIRR, profitability index and equivalent annual annuity
  • Estimate project discount rates using WACC, CAPM and risk-premium principles
  • Perform sensitivity, scenario, break-even and switching-value analysis
  • Model uncertainty using probability distributions, correlations and Monte Carlo simulation
  • Quantify project risks through risk registers, contingency analysis and risk-adjusted cash flows
  • Apply decision trees, expected monetary value and real-options reasoning to investment choices
  • Prepare an evidence-based investment case with decision triggers and governance controls

Benefits of attending

For you

  • Produce investment appraisals that show both expected value and downside exposure
  • Challenge unsupported assumptions in capital requests and project forecasts
  • Explain NPV, uncertainty and decision trade-offs clearly to non-finance stakeholders
  • Assess whether contingency, staged funding or further research is financially justified
  • Strengthen credibility in project approval, governance and commercial decision meetings

For your organisation

  • Improve capital allocation through consistent risk-adjusted project appraisal
  • Expose value-destroying assumptions before major funding commitments are approved
  • Reduce optimism bias through structured sensitivity, scenario and independent-review methods
  • Align contingency reserves with quantified uncertainty and defined release authority
  • Create clearer investment cases for boards, lenders, donors and public-sector approvers

Course modules

10 modules over 5 days

Participants can define the economic basis, value drivers and assumptions for a project appraisal.

  • Project value drivers linked to scope, schedule, capacity and operating assumptions
  • Lifecycle cost structure: development, capital, commissioning, operations, closure and residuals
  • Incremental cash flow principle distinguishes project effects from accounting allocations
  • Opportunity costs, sunk costs and externalities treated consistently in appraisals
  • Nominal versus real terms matched to inflation and discount-rate assumptions
  • Stakeholder value perspectives: sponsor, lender, taxpayer, customer and community
  • Base-case assumptions documented through an auditable economic model charter

Participants can construct auditable, time-phased project cash flow models from operational assumptions.

  • Work breakdown structures translated into time-phased capital expenditure estimates
  • Operating cost drivers modelled using fixed, variable and step-cost relationships
  • Revenue forecasts built from volumes, prices, utilisation and collection lags
  • Depreciation, taxes and working capital incorporated without double counting
  • Terminal value, salvage proceeds and decommissioning liabilities timed correctly
  • Three-statement links checked between profit, cash flow and balance sheet
  • Assumption registers assign sources, owners, ranges and review dates

Participants can evaluate project alternatives using discounted cash flow and comparative appraisal methods.

  • Discounted cash flow timing conventions applied using end-period and mid-year factors
  • Net present value calculated from free cash flows and hurdle rates
  • Internal rate of return interpreted with reinvestment-rate limitations
  • Modified IRR and profitability index used for mutually constrained investments
  • Equivalent annual annuity compares alternatives with unequal operating lives
  • Payback and discounted payback positioned as liquidity screening measures
  • NPV profiles reveal crossover rates and financing-independent project rankings

Participants can select consistent discount-rate assumptions and assess financing effects on project value.

  • Weighted average cost of capital derived from target debt-equity proportions
  • CAPM cost of equity estimated using beta, risk-free rate and premium
  • Country, currency and project-specific risk premiums assessed without double counting
  • Debt sculpting aligns repayment profiles with projected cash available for debt service
  • Loan covenants tested through DSCR, LLCR and reserve-account requirements
  • APV separates operating value, financing side effects and subsidised borrowing
  • Consistency checks align currency, inflation, tax and discount-rate bases

Participants can identify the assumptions that most affect project value and viability.

  • One-way sensitivity tables rank assumptions by change in net present value
  • Tornado charts display high-impact variables and economically material thresholds
  • Two-way data tables test price-volume and cost-schedule interactions
  • Break-even analysis identifies minimum demand, price or completion-date requirements
  • Scenario narratives distinguish downside cases from internally consistent futures
  • Switching values quantify assumption changes required to reverse decisions
  • Model controls prevent hidden hardcodes, circularity errors and formula breaks

Participants can model uncertainty probabilistically and interpret simulated project-value outcomes.

  • Probability distributions selected for bounded costs, skewed durations and revenues
  • Expected monetary value combines outcome probabilities with financial consequences
  • Correlation assumptions prevent false diversification in multi-variable simulations
  • Monte Carlo simulation generates NPV distributions, percentiles and downside probabilities
  • Confidence intervals and percentiles communicated without implying certainty
  • Value at risk and conditional value at risk compared carefully
  • Simulation inputs documented with sources, ranges and dependency rationale

Participants can connect risk-management actions, contingency reserves and financial exposure estimates.

  • ISO 31000 principles frame risk governance, context, treatment and monitoring
  • Risk breakdown structures categorise technical, commercial, political and environmental exposures
  • Risk registers record causes, events, consequences, owners, indicators and responses
  • Probability-impact matrices prioritise risks while retaining financial exposure estimates
  • Contingency and management reserve distinguished by ownership and release authority
  • Risk-adjusted cash flows compared with risk-adjusted discount-rate approaches
  • Residual risk acceptance documented against agreed appetite and tolerance limits

Participants can choose between sequential project options using structured decision-analysis methods.

  • Decision trees map sequential choices, chance events, probabilities and payoffs
  • Rollback analysis identifies optimal decisions using expected monetary value
  • Utility functions reflect risk aversion where expected value misleads
  • Bayesian updating revises probabilities when market research or tests arrive
  • Expected value of information tests whether further evidence justifies cost
  • Real options value deferral, expansion, abandonment and staged investment rights
  • Decision gates connect evidence thresholds, authority levels and funding releases

Participants can assess how contracts, procurement choices and market exposures affect project economics.

  • Contract types allocate cost, schedule and performance risks between parties
  • Fixed-price, reimbursable and target-cost mechanisms tested against uncertainty profiles
  • Liquidated damages, bonuses and pain-gain shares modelled as cash-flow contingencies
  • Bid evaluation separates lowest price from lowest evaluated lifecycle cost
  • Public-private partnership cash flows assess availability payments, demand and termination provisions
  • Foreign exchange exposures modelled using transaction currencies, hedging costs and pass-through
  • Claims and change-control assumptions linked to schedule and cost risk

Participants can present a defensible investment recommendation with clear controls and decision triggers.

  • Investment cases structure strategic rationale, economics, risks, options and recommendation
  • Executive dashboards present base case, downside, sensitivities and decision triggers
  • Model audit trails document inputs, calculations, version control and approvals
  • Independent review questions challenge optimism bias, anchoring and strategic misrepresentation
  • Post-investment reviews compare realised value, forecasts, variances and lessons
  • Action plans assign model improvements, governance actions and decision milestones

Exercises and examples are adapted to each cohort's sectors and roles.

What you take back to work

  1. Project economics model charter template
  2. Time-phased cash flow model structure
  3. Investment appraisal calculation checklist
  4. Sensitivity and scenario analysis template
  5. Risk-adjusted contingency assessment framework
  6. Investment case and decision-gate checklist

Who should attend

  • Project Finance Managers — assess project value, funding structures and approval submissions
  • Project Managers — translate scope, schedule and delivery risks into financial impacts
  • Investment Analysts — prepare appraisals and compare competing capital proposals
  • Financial Planning Analysts — test assumptions, forecast cash flows and challenge business cases
  • Engineers and Technical Leads — quantify technical uncertainty within project economics
  • Procurement and Commercial Managers — assess contractual risk allocation and lifecycle costs

Skills and tools covered

Project cash flow modellingInvestment appraisalRisk quantificationMonte Carlo analysisDecision tree analysisInvestment case governance

Tools and standards

Discounted Cash Flow, Monte Carlo simulation, Decision trees, ISO 31000

How the course runs

Training methodology

The course uses short instructor briefings followed by worked cases, spreadsheet-based analysis, group discussions and decision simulations. Participants build and review project cash flow assumptions, compare appraisal results, test downside scenarios and interpret probabilistic outputs. Cases reflect capital projects, service investments, procurement choices and staged programmes. Facilitated model reviews focus on common errors such as inconsistent discount rates, double counting risk and unsupported contingency. Each participant develops an application plan for a current or anticipated project decision.

Requirements and prerequisites

Participants should understand basic financial statements, percentage calculations and the purpose of discounted cash flow analysis. Experience contributing to budgets, forecasts, project plans, capital requests, procurement decisions or business cases is helpful. Participants should be comfortable working with spreadsheets and interpreting common finance terms such as revenue, cost, cash flow, depreciation and working capital. Prior use of Monte Carlo software, decision trees, advanced statistics, corporate finance qualifications or programming is not required. The course explains the required probability and valuation concepts before applying them.

A typical training day

08:30 – 10:30First session
10:30 – 10:45Refreshment break
10:45 – 12:30Second session
12:30 – 13:30Lunch and networking
13:30 – 15:00Third session
15:00 – 15:15Refreshment break
15:15 – 16:30Workshop and daily review

Live online deliveries follow the same structure in East Africa Time, with shorter screen blocks and longer breaks.

What the fee includes

  • Instruction by a practitioner facilitator
  • Full course workbook and materials
  • Exercise files, templates and case studies
  • Refreshments and lunch on classroom deliveries
  • Certificate of completion
  • Post-course application plan

Frequently asked questions

Participants need a basic understanding of financial statements, budgeting and spreadsheet use. The course teaches the required probability, discounting and decision-analysis concepts, so advanced statistics or specialist finance qualifications are not required.

Participants should bring a laptop with spreadsheet software if attending in person, plus a current or recent project proposal if confidentiality permits. Course materials and case data are provided by the instructor.

It suits professionals who prepare, review, approve or challenge capital project decisions. Typical participants include project finance managers, project managers, analysts, engineers, commercial managers and programme leaders.

Financial modelling courses often focus on spreadsheet construction and corporate forecasting. This course concentrates on project investment decisions, including risk quantification, uncertainty, contingency, decision trees, contracts and staged investment choices.

Participants can use the model structure, assumption register and investment-case checklist to improve an active business case or capital request. They can also apply sensitivity analysis and decision gates to challenge project assumptions before funding approval.

The five days provide approximately 32.5 contact hours, delivered from 08:30 to 16:30. Time is divided across ten modules covering project economics, cash flow modelling, appraisal, risk analysis, decision methods, commercial structures and investment-case governance.

Questions about this course?

Ask about dates, fees, group bookings or running it for your team. Our training team replies by email.

Ask on WhatsApp info@skillsetdevelopment.com

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