Research On The Risk For Project Financing Of Power Plant

The electric system reform makes the electric market change very greatly. Theelectric Utilities in the past that were not only purchasing power side but also sellingpower side had been divided into Grid Co. and Independent Power Producers. The pricingmode of the power plants will transform from "one plant one price"to "bidding price toGrid"step by step. These reforms would bring a lot of new risks for the investment andfinancing of power plant. As investment system reform going on, these activities will beconfronted with more heavy uncertainty. The study on these risks, contribute to ouranalyzing and tackling the risk met in project financing, to setting up steady financingstructure and supporting the construction and operation of the project.On the basis of summarizing project financing and risk management theory, thisthesis make systematic identification and analysis to the risk faced in project financing ofpower plant,especially to decision risk, market risk and management risk changedbecause of reform. In risk evaluation, the thesis makes detailed research to various kindsof future uncertainty of cash flow that every risk may cause. This thesis uses CAPM torevise the risk discount rate in the project of power plant, in order to replace the relativelyregular industry benchmark discount rate used in the past. This thesis has also discussedthe cash flow indexes of the power plant project, and analyzed the uncertainty of theproject cash flow from different angles. Considering that a lot of project financing risksare unable to be done quantitative analysis, the thesis apply Fuzzy Evaluation method toquantify the qualitative risks on the basis of experience data and expert's ability fordecision reference. Unless considering objective factor, the thesis has also discussed somesubjective factors, such as risk partiality and utility function that are played an importantrole in the project decision, in order to measure the overall financing risks.After identifying and evaluating the risks, the thesis summarizes some primarilytechnological method used as risk handling in terms of risk management, and expoundsthe generality method commonly used in the project financing of power plant. On thisbasis, for helpfully handling some new risk that may appear to future power plantfinancing in the new investment and financing environment, the thesis puts forward somenew measures by combining past experience and consulting the experts'advices.