Financing the Mozal Project Case Solution

Case Solution

It's June 1997, together with a group within the Worldwide Finance Corp. (IFC) is recommending the board approve a $120 million acquisition of a $1.4 billion aluminum smelter in Mozambique, known to as Mozal project. Four factors increase the risk for investment questionable: it may be the IFC's greatest investment in the world, total investment is almost how large Mozambique's gross domestic project (GDP), Mozambique had only recently emerged from 2 decades of civil war, and lots of key contractual issues continued to be as undecided. Because commercial bankers have rejected to purchase the sale unless of course obviously the IFC is involved, the sponsors have requested IFC participation. When the IFC's board will agree it's the correct some time and a good option to produce this kind of large investment remains 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?