Small But Strong Outstanding University

Professor’s Profile

Park Soo-jin

  • Major : Finance
  • Professor Assistant Professor
  • Office : Room 304 Main Bldg.
  • Phone : +82-52-712-7326
  • Email : jin.park@kings.ac.kr

Educational Background

- Ph.D., Development Policy, KDI School of Public Policy and Management

- M.P.S., Baker Program, Cornell Univ.
- B.S., Business Administration, Yonsei Univ.

- KICPA, CTA, CIA

Professional Experience

- Research Fellow, Dept. of Business & Finance Research, Construction and Economy Research Institute of Korea (2016~2019)

- Head of Public Investment Policy Team, PIMAC(Public and Private Infrastructure Investment Management Center) of KDI (2012~2016)

- Sr. Manager, Finance Group, POSCO E&C (2010~2012)

- Senior Manager, Financial Risk Consulting Division, PROTIVITI (2004~2008)

- Manager, DTCF, Deloitte (2000~2004)

- APEC PPP Expert Panel (2014~2015)

- PPP Body of Knowledge in World Bank Group (2013~2014)

Research

Project Valuation and Risk Analysis

[Description] The practical valuation process is mostly based on an approach such as the discounted cash flow (DCF) analysis or multiples method. Primarily, the DCF analysis is used to value equity investments in two ways: indirectly by discounting the free cash flow to the firm (FCFF) with the weighted cost of capital and subtracting the debt value afterwards. And, directly discounting the free cash flow to equity (FCFE) using the cost of equity. 
  At any cases, major issues arise: the determination of the risk-adjusted cost of capital (equity) is practically hard to measure, which is one of research topic in project valuation. It is important to account for the uncertainty in discounting the future cash flows. 
  Additionally, the DCF approach accounts neither for investment irreversibility, nor for managerial flexibility. Irreversibility is not treated as a cost, which is the opportunity cost of money being invested, and flexibility, given up by making an investment, is not recognized as economic opportunity cost. As a result, enhancing project valuation knowledge by applying real option modeling is one of the key reearch topic, which is often used in derivatives. The advantage of using this methodology is to be able to consider three very important characteristics of investment – uncertainty, irreversibility and managerial flexibility. Real options approach is superior to the traditional DCF approach in this aspect and is used to value projects in energy markets more often because of the ability to incorporate various kinds of uncertainties. Moreover, investments in nuclear power plants are irreversible due to the industry specific expenditures and because of that traditional DCF analysis becomes inappropriate. 

[Related Publication and Projects]
1. ‘National SOC (Social Overhead Capital) Maintenance and Reinvestment Cost Estimation’, MOLIT (2018)  
2. ‘The Optimal Risk Premium of BTL(Build-Transfer-Lease) Project: Theoretical and Empirical Investigation’, KDI School of Public Policy and Management, (2015) 
3. ‘Determining Factors on the Project Return in Public-Private Partnership’, KDI, (2015)  
4. Nam-Din Coal Power Plant in Vietnam: performed business feasibility study ($2.24bil. of investment budget) in favor of EWP and MOSF 
5. Chungnam-Sejing Hospital : prepared a social feasibility study on the $243.4 mil. of investment budget in favor of MOSF 
6. Sinbundang Metro Line ($932 mil. of investment value), Gum-Dan Sewage Plant ($65.2 mil), and Jang-Ryang Sewage Plant ($54.7 mil): assessed project refinancing plan in favor of MOSF 
7. Seosuwon-Osan-Pyeongtaek Highway: assessed a business restructuring plan of the $779 mil investment in favor of MOLIT 
8. Bongdam-Songsan Highway Project: evaluated business proposal and selected preferred bidder
9. Po-Hang Purification Plant ($149.9 mil), Manduck-Centum highway ($1.1 bil.), Peoyng-Teak Water Park ($1.8 bil. of investment budget), and UNIST dormitories ($175.45 mil.): Performed Financial and social feasibility studies in favor of MOSF
10. LG Credit Card: executed valuation and turnaround advisory service on behalf of Korea Development Bank.
11. National Agriculture Central Federation Bank: developed Bad-Debt Loss Fund system within the financial strategy consulting division. 
12. POWER Com: performed due diligence and valuation for equity acquisition by DACOM 
13. Daewoo Automotive: Executed due diligence and valuation of the Boryong Transmission Plant
14. Electronic Public Procurement System of e-Government: designed the vendor’s financial credit scoring module

Project Financing

[Description] Project financing date back to the 13th century, when the financing of a mining operation was structured. But it was mainly used to finance large scale investment projects such as off-shore oil fields or remote mining operations before the 1990s. In the early 1990s, with the modern form of PPP appears, the field of structured finance research emerged in its modern form as a funding instrument for a wide variety of asset types, investment volumes and geographic markets and became an established discipline. Examples of research area are as follows:
 The simple yet critical research topic is whether the capital structure matters in funding power project. The growing use of project finance challenges the Modigliani and Miller’s (1958) ‘irrelevance’ proposition, the idea that corporate financing decisions do not affect firm value under certain conditions. One of the key assumptions underlying their irrelevance proposition is that financing and investment decisions are separable and independent.  
 The second example of research topic is whether organizational form can be used as a risk management tool in project financing. Most of the research to date has focused more narrowly on risk management through financial instruments. Given the extensive contracting that supports project companies there is a great opportunity to analyze contracting issues for plant assets in the presence of agency conflicts and extensive transaction costs (e.g., Joskow, 1985). 
 The third example of topic is comparative studies (meta-analysis) on power plant financing documents. Similar topic is to analyze risk transfer arrangements among contracts in various economies and under legal framework. Reviewing the body of work published in scientific journals during the years 2009~2013, four core areas of research progress pertaining to project finance are ‘contractual arrangements and the legal framework’, ‘project risk measurement and selection’, ‘public sector risk share and globalization of project development’, ‘trend of renewable energy financing’.
 The fourth example is to investigate critical factors that may affect to the bankability of project financing in power sector. This is closely related with the risk analysis topics however, individual aspects in contracts should be considered. The example is ‘Success Stories and Lessons Learned from PPP Projects in Korea’ (2014), which was submitted to APEC secretariat for the ‘Guidebook on Public Private Partnership Frameworks in APEC Region’ (2014).

[Related Publication and Projects]
1. ‘Infrastructure Fund Invigoration: Policy and Strategy’, MOSF and KDI, (2018) 
2. ‘A Study on the Optimal Risk Sharing Structure of Infrastructure Investment’, KDI, (2018) 
3. ‘Improvement of the Risk Sharing Scheme in the National BTO Contract Guideline’, MOSF, (2018)
4. ‘Improvement of PPP Project Refinancing Guideline’, CERIK, (2017)  
5. ‘A study on demand risk sharing mechanism for Public-Private Partnership contract’, KDI, (2016) 
6. ‘Success Stories and Lessons Learned from PPP Projects in Korea’, submitted to APEC secretariat and included the ‘Guidebook on Public-Private Partnership Frameworks in APEC Region’, (2014) 
7. ‘Bridging Long-term Private Capital over Public-Private Partnership’, OECD and KDI, (2014) 
8. ‘Cooperative Initiative of G20 Economies for Public-Private Partnership’, MOSF, (2014)  
9. An-San Combined Cycle LNG Power Plant: closed $225mil of equity investment and arranged $515mil of debt 
10. Chun-Chun Combined Cycle LNG Power Plant: closed $148 mil of equity and $426 mil of senior loan 
11. Po-Hang RDF power plant (BTO): reviewed project feasibility and prepared funding 
12. U-yi~Shin-sul Subway: closed $98mil of equity investment along with $370 mil of project loan 
13. Kim-hae Light Transit: refinanced $720mil of project loan  
14. Incheon-Kimpo Highway: reviewed feasibility study and financed $1bil of project loan  
15. Tae-Gi-San wind power plant: project refinancing and equity exit to KB and Eurus funds.  
16. Cochrane Coal Power Plant in Chile: arranged ECA financing from K-SURE and KoFC in favor of AES Gener(project owner)  
17. Ga-Ro-Rim Tidal Power: reviewed financial feasibility study in favor of lenders ($1.1bil) for refinancing 

Infrastructure/Energy Investment Policy

[Description] Infrastructure investment systme and public policy determines the long-term economic growth as well as the quality of citizen's life. The policy research topics are mostly focused on National investment decision and private involvement in public infrastructure as a form of PPP(Public-Private Partnership). 

[Related Publication]
1. ‘Aging Population and House Price: Empirical Study with Vector Error Correction Model (VECM)’, Journal of Korean Economic Analysis, (2018) 
2. ‘The Relationship between Macroeconomic Variables and Default Rate in Construction Industry’, CERIK, (2018)  
3. ‘Enhancing the Publicness of National Public-Private Partnership Policy’, CERIK, (2018) 
4. ‘International Comparative Study on the Public-Private Partnership Policy and Outcome’, KDI, (2017)  
5. ‘A New Infrastructure Paradigm and Long-term Investment Direction’, CERIK, (2017) 
6. ‘The Infrastructure Quality Enhancement for the Fourth Industrial Revolution’, CERIK, (2017)  
7. ‘A Study on the Social Discount Rate of Korea’, KDI, (2015)  
 

Lab Members

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Radioactive Waste and Spent Fuel Management

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Introduction To the Courses

Principles of Economics

Introduction
The course will cover a range of fundamental theories in economics including consumer and producer behaviors, supply and demand mechanism, market equilibrium, economic growth theory and National income, etc. Students are expected to develop insights behind each economic concept, theories to formalize it and, more importantly, the ability to apply their knowledge to practical economic/business problems.

Course Objectives
The purpose of this course is to provide an overview and solid ground in economics as a social science to those wishing to learn the basics of energy economics. However, at the same time, the course also provides real power sector cases to which the theories may be applied. Developing students’ thinking framework and enlarging their analytical horizon on economic issues is our priority. 

Student Outcomes
After completing this course, you should be able to: 
① Understand tools, graphs, and basic economic models 
② Understand how individuals, households, businesses, and a government make economic decisions under the condition of resource scarcity 
③ Understand the working of markets and businesses 
④ Understand the behavior of industries 
⑤ Develop logical thought about socio-economic issues
⑥ Understand how the government’s economic policies affect individuals, businesses, and society 

Financial Theory for Engineers

Introduction
The course covers topics including capital budgeting under uncertainty, risk and return, capital structure, and power project valuation, and basic option theory. Especially, in the second part of course, Professor Roh will give lectures on power project feasibility, cost management, NPP(Nuclear Power Plant) economics, and environment topics with real world practice. In overall, this course is intended to build a cornerstone for the mandatory ‘Project Valuation and Risk Analysis’ course in the second semester. If a student in Energy Policy and Engineering doesn’t have a finance knowledge, it is recommended that he/she attend this class.

Course Objectives
The purpose of this course is to provide an overview and solid ground in energy finance and their application on top of general finance theories and decision-making tools. Students are also expected to acquire excel technique to realize the basic financial analysis. 

Student Outcomes
After completing this course, you should be able to:
① Understand tools, graphs, and basic finance theory concepts
② Compute the future value, present value and the rate of return on an investment for projects that involve single or multiple cash flow(s).
③ Know the power project feasibility, cost management and, NPP economics
④ Know the important types of bonds and understand the determinants of bond yields.
⑤ Understand the impact of inflation on interest rates and the term structure of interest rates.
⑥ Recognize how stock prices depend on future dividends and be able to compute stock prices using the dividend growth model.
⑦ Understand how financial markets work and know the historical rate of returns and risks on various types of investments.
⑧ Calculate expected value and standard deviation (risk) of investment returns and understand the risk-return tradeoff.
⑨ Appreciate the impact of diversification and have a basic understanding of the systematic risk principle.
⑩ Know what determines a firm’s overall cost of capital. 

Publications, Projects and Awards

- ‘Aging Population and House Price: Empirical Study with Vector Error Correction Model (VECM)’, Journal of Korean Economic Analysis, (2018)

- ‘The Relationship between Macroeconomic Variables and Default Rate in Construction Industry’, CERIK, (2018)  

- ‘Enhancing the Publicness of National Public-Private Partnership Policy’, CERIK, (2018)

- ‘Infrastructure Fund Invigoration: Policy and Strategy’, MOSF and KDI, (2018)

- ‘A Study on the Optimal Risk Sharing Structure of Infrastructure Investment’, KDI, (2018)

- ‘Improvement of the Risk Sharing Scheme in the National BTO Contract Guideline’, MOSF, (2018)

- ‘National SOC (Social Overhead Capital) Maintenance and Reinvestment Cost Estimation’, MOLIT (2018)  

- ‘A New Business Strategy for Construction Guarantee’, CERIK, (2018)

- ‘International Comparative Study on the Public-Private Partnership Policy and Outcome’, KDI, (2017)  

- ‘Improvement of PPP Project Refinancing Guideline’, CERIK, (2017)  

- ‘A New Infrastructure Paradigm and Long-term Investment Direction’, CERIK, (2017)

- ‘The Infrastructure Quality Enhancement for the Fourth Industrial Revolution’, CERIK, (2017)  

- ‘US Construction Market and Entry Strategy for Korean Constructors’, CERIK, (2017)  

- ‘A study on demand risk sharing mechanism for Public-Private Partnership contract’, KDI, (2016)

- ‘The Optimal Risk Premium of BTL(Build-Transfer-Lease) Project: Theoretical and Empirical Investigation’, KDI School of Public Policy and Management, (2015)

- ‘A Long-term Reorganization Plan of the National Loan’s Fund’, MOSF, (2015)

- ‘A Study on the Social Discount Rate of Korea’, KDI, (2015)  

- ‘Determining Factors on the Project Return in Public-Private Partnership’, KDI, (2015)  

- ‘2015 National PPP Basic Plan’, MOSF, (2015)

- ‘Success Stories and Lessons Learned from PPP Projects in Korea’, submitted to APEC secretariat and included the ‘Guidebook on Public-Private Partnership Frameworks in APEC Region’, (2014)

- ‘Bridging Long-term Private Capital over Public-Private Partnership’, OECD and KDI, (2014)

- ‘Cooperative Initiative of G20 Economies for Public-Private Partnership’, MOSF, (2014)  

Projects

'- Nam-Din Coal Power Plant in Vietnam: performed business feasibility study ($2.24bil. of investment budget) in favor of EWP and MOSF 
- An-San Combined Cycle LNG Power Plant: closed $225mil of equity investment and arranged $515mil of debt 
- Chun-Chun Combined Cycle LNG Power Plant: closed $148 mil of equity and $426 mil of senior loan 
- Po-Hang RDF power plant (BTO): reviewed project feasibility and prepared funding 
- U-yi~Shin-sul Subway: closed $98mil of equity investment along with $370 mil of project loan 
- Kim-hae Light Transit: refinanced $720mil of project loan  
- Incheon-Kimpo Highway: reviewed feasibility study and financed $1bil of project loan 
- Po-Hang Purification Plant ($149.9 mil), Manduck-Centum highway ($1.1 bil.), Peoyng-Teak Water Park ($1.8 bil. of investment budget), and UNIST dormitories ($175.45 mil.): Performed Financial and social feasibility studies in favor of MOSF 
- Tae-Gi-San wind power plant: project refinancing and equity exit to KB and Eurus funds.  
- Cochrane Coal Power Plant in Chile: arranged ECA financing from K-SURE and KoFC in favor of AES Gener(project owner)  
- Ga-Ro-Rim Tidal Power: reviewed financial feasibility study in favor of lenders ($1.1bil) for refinancing 
- Chungnam-Sejing Hospital : prepared a social feasibility study on the $243.4 mil. of investment budget in favor of MOSF 
- Sinbundang Metro Line ($932 mil. of investment value), Gum-Dan Sewage Plant ($65.2 mil), and Jang-Ryang Sewage Plant ($54.7 mil): assessed project refinancing plan in favor of MOSF 
- Seosuwon-Osan-Pyeongtaek Highway: assessed a business restructuring plan of the $779 mil investment in favor of MOLIT 
- Bongdam-Songsan Highway Project: evaluated business proposal and selected preferred bidder
- LG Credit Card: executed turnaround advisory service on behalf of Korea Development Bank.
- National Agriculture Central Federation Bank: developed Bad-Debt Loss Fund system within the financial strategy consulting division. 
- POWER Com: performed due diligence and valuation for equity acquisition by DACOM 
- Daewoo Automotive: Executed due diligence and valuation of the Boryong Transmission Plant
- Electronic Public Procurement System of e-Government: designed the vendor’s financial credit scoring module
- Dell Computer, and General Motors Korea: consulted internal audit and financial risk control process 

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