Analysis On Risk Issue In Project Financing

Project Financing, as a new financing tool, was emerged in the international capital markets in 1970s and has developed into an efficient wide-used financing method in infrastructure's construction. In the mid of 1980s, China introduced Project Financing for the first time. As China's capital market opens more widely to the outside world, Project Financing gains rapid development and plays important roles in infrastructure financing. But, it also has its demerits. Long-time negotiation, a wide variety of involved parties and complicated structure exposed to many risks and so that it is asked to implement rigid supervision and risk management during the whole financing course. But in China, Project Financing is still at the starting stage and leaves us many things to explore, so people, especially those who are affected by planned-economics lack risk consciousness. is still at the qualitative analysis stage, In most cases, people thinks risk arrangement or risk control as risk management by mistake, so the paper is emphasized on the method of risk identification, analysis and control.The paper is divided into 5 parts: Chapter 1 describes the background, study status in domestic and abroad, research method and scope. Chapter 2 is the whole acquaintance of project financing relative risk theory. Through introducing the main theory of project financing systematically, the basic knowledge of risk management, make reader elementary comprehending for concept,character,mode and process. Chapter 3 is the risk issues analysis and evaluation of project financing. Introduce the basal theory. Using Monte Carlo and Matlab, make mensurable forecast, evaluate the risk of invest & financing decision-making, and make the evaluation of project financing risk systematization. Chapter 4 is the countermeasure of evading financing risk by Monte Carlo. In the part, through summarizing the using of Monte Carlo, bring forward the special countermeasure of evading financing risk.The last chapter draws a conclusion of all, summing up what is creative in this article, and suggests what should be done to further improve this study.