Political risk, project finance, and the participation of development banks in syndicated lending

2012 ◽  
Vol 21 (2) ◽  
pp. 287-314 ◽  
Author(s):  
Christa Hainz ◽  
Stefanie Kleimeier
Keyword(s):  
Political Risk ◽  
Project Finance ◽  
Development Banks

9 Official Funding Sources: Export Credit Agencies and Multilateral Development Banks

2015 ◽  
Author(s):  
Borisoff Alexander ◽  
Compton Andrew
Keyword(s):  
Project Finance ◽  
Export Credit ◽  
Working Capital ◽  
Multilateral Development Banks ◽  
Funding Sources ◽  
Loan Guarantees ◽  
Development Banks ◽  
Export Credits ◽  
Risk Insurance ◽  
Export Credit Agencies

This chapter provides an overview of official funding sources available in the project finance arena, including from export credit agencies, multilateral development banks, and governmental and quasi-governmental entities. The forepart of the chapter describes export credit agencies and multilateral development banks generally, as well as hybrid-type official funding sources. The second part of the chapter explores the types of funding these entities provide, including loans, loan guarantees, political risk insurance, working capital facilities, equity investments, and bond guarantees. The chapter concludes by assessing regulatory regimes applicable to export credit agencies, including the voluntary OECD Consensus or Arrangement on Export Credits that seeks to promote transparency among export credit agencies, and other common issues and considerations to explore when seeking funding by way of such an official funding source.

4 Project Risks

2019 ◽  
Author(s):  
Dewar John ◽  
Szczetnikowicz Suzanne ◽  
Roberts Jonathan
Keyword(s):  
Political Risk ◽  
Project Finance ◽  
Project Financing ◽  
Currency Risk ◽  
The Future ◽  
Project Risks ◽  
Operating Risk ◽  
The Impact ◽  
Future Project

This chapter discusses various project risks (e.g. completion risk, operating risk, currency risk, political risk, etc.). The business of project financing is founded upon the identification, assessment, allocation, negotiation, and management of the risks associated with a particular project. Indeed, as project finance lenders look to the revenues generated by the operation of the financed project for the source of funds from which that financing will be repaid, the whole basis for project financing revolves around an understanding of the future project revenues and the impact of various risks upon them. Projects face a variety of risks, and not all of these risks can be easily identified, mitigated, or contracted away. However, such risks can be assessed, allocated, and managed so that a project is commercially reasonable. The first step is to identify the material risks and the second is to decide how they should be addressed.

Project finance loan spreads and disaggregated political risk

2011 ◽  
Vol 21 (23) ◽  
pp. 1725-1734 ◽  
Author(s):  
Claudia Girardone ◽  
Stuart Snaith
Keyword(s):  
Political Risk ◽  
Project Finance ◽  
Loan Spreads

15 Dispute Resolution in Project Finance Transactions

2015 ◽  
Author(s):  
Nolan Michael ◽  
Canning Tom ◽  
Culbertson Erin ◽  
Hogwood Emma ◽  
Kinninmont Paul
Keyword(s):  
Risk Factors ◽  
Dispute Resolution ◽  
Political Risk ◽  
Project Finance ◽  
International Arbitration ◽  
Advantages And Disadvantages ◽  
Cross Border ◽  
Additional Protection ◽  
Project Participants ◽  
Investment Treaties

Dispute resolution mechanisms in the project finance context are a means of enforcing the allocation of risksamong a project’s many participants. Swift, flexible, final, and enforceabledispute resolution mechanisms allow a project’s intended risk allocations to be maintained. This chapter identifies various dispute resolution mechanisms available to project participants. Much of the chapter is devoted to exploring the advantages and disadvantages of two dispute resolution regimes—litigation and international arbitration—including looking at enforcement. It considers how investment treaties provide additional protection against political risk factors faced by cross-border projects and describes typical dispute resolution fora(such as ICSID)for investor–state disputes. The chapter also provides a ‘toolkit’ for drafting dispute resolution provisions designed to achieve participants’ goals.

Loan tenor in project finance

2019 ◽  
Vol 12 (3) ◽  
pp. 825-842 ◽  
Author(s):  
Wouter Thierie ◽  
Lieven De Moor
Keyword(s):  
Political Risk ◽  
Bank Lending ◽  
Bank Loans ◽  
Policy Implications ◽  
Project Finance ◽  
Basel Iii ◽  
Infrastructure Projects ◽  
Data Set ◽  
Content Type ◽  
The Impact

Purpose The purpose of this paper is to develop a better understanding of the debt structuring of project finance (PF) loans and the main drivers affecting the maturity of bank loans in infrastructure deals. When banks grant loans to a project, they have two decision variables: the interest margin or the spread and the maturity of the loan. Although several studies analyze the drivers of the spread, few studies in the literature look at the maturity of bank loans. As infrastructure projects are typically highly leveraged, the structuring of bank lending is an important parameter in the financial viability of the project. Design/methodology/approach The paper develops a regression analysis of the loan’s maturity on four categories: characteristics of the project, political risk of the country where the project is executed, the macro-economic setting and the regulatory framework. By using a new data set of InfraDeals containing data on bank loans of more than 1,800 infrastructure projects worldwide from 1997 to 2016, this paper reveals new insights on the debt structuring of banks for PF loans. Findings The results indicate that the maturity of bank loans granted to infrastructure deals is predominantly driven by political risk and regulation, rather than the structuring of the project. This implicates that the region where the deal is closed weighs more heavily than the specificities of the project itself. Originality/value The results have important policy implications. The paper allows to develop a better understanding on how political risk and new regulation, like Basel III, might affect the PF market. The paper is the first one finding empirical evidence of the impact of Basel III regulation on PF lending. By delving deeper into the political risk variable, the authors formulate several recommendations to mitigate political risk.

Sign in / Sign up

Export Citation Format

Share Document