Case ID: 200005
Solution ID: 22239
Words: 1275
Price $ 45

Financing the Mozal Project Case Solution

Case Solution

In June 1997, a group from the International Finance Corp. (IFC) is suggested that the management agrees to a $120 million funding  in a $1.4 billion aluminum smelter in Mozambique, famous as the Mozalproject. Four variables make the venture disputable: it would be the IFC's biggest financingglobally; total financing cost is the same as Mozambique's gross domestic product (GDP), Mozambique had only recovered from 2 decades of war, and a number of significant functional matters and concerns were undecided. Since business bankers have declined to fund the arrangement unless the IFC is taken on board, the funders have asked for IFC involvement. Whether the IFC's management will concur that it is the adequate time and the opportunity to make such a huge venture stays to be seen

Excel Calculations

Questions Covered

What is IFC's competitive advantage?

How does the IFC involvement affect the deal?

Is the return to Alusaf/Gencor from investing in the project adequate?

What are the greatest risks? Have they been adequately addressed?

As an IFC board member, would you approve the recommended investment in Mozal?