Project Finance, BOT Projects and Risk

Project and other structured finance models have become a method of choice for financing infrastructure projects in many different sectors across the globe. They allow greater flexibility for governments and project sponsors wishing to develop infrastructure without the concomitant burden on their balance sheets and their ability to fund other needs and priorities.

<p class=copymedium>However, the fall of Enron, WorldCom and so many other organisations who pushed the structured finance model one step too far has raised alarm bells. Has project and structured finance seen the end of its useful life? Are the risks surrounding such projects so extreme as to bring into question their usefulness?

<p class=copymedium>The viability of structured infrastructure projects relies on a comprehensive, yet sensible assessment of risk and allocation of that risk in an efficient manner. Yet our understanding of efficient risk allocation often runs contrary to the actual risk allocation models that we apply to such projects. Risk analysis for complex projects requires a level of sophistication and objectivity of which few individuals are capable.

<p class=copymedium>Jeff Delmon's book addresses the many issues around risk and structured infrastructure projects. It is not a dry legal treatise, but an eminently readable and practical explanation of efficient risk allocation and the contractual framework which forms the bedrock of BOT and other project finance transactions. Based on Jeff's practical experience in the sector, this book provides practical guidance and insight into many of the pitfalls often encountered in such projects.

<p class=copymedium>This book is ideal for those relatively new to the issues surrounding project finance and risk as well as those with significant experience as an aide-memoire and a challenge to the approaches to risk allocation that are so often applied to such transactions.