The Role And Position In The Law Of The Government In International Project Financing

During the latest half century, project financing has been widely applied all overthe world as a very efficient investment and finance way.The key to promote a project financing is to prevent or decrease the risks of theproject by any reasonable measures, for it is a kind of financing relevant of largequantity of money. Compared with other traditional financing ways, project financingis not only different in the aspects as operation and efficiency, but also far moredependent on the host government of project about management of risks. Especiallyin developing counties, such as China, the government always participate in theoperating the project too much to attract more and more foreign investment. By doinglike this does bring us a lot of disadvantages in practice, which makes people realizethat if the government play a very active role in project financing, may be helpful inattracting foreign investment, however, that may also harm the privatization andgovernment finance in a long run. The author suggests that the government will notkeep balance with run the financing project successfully and decrease its risk wellonly when it learns to abandon the blindness of its role and find the right role in lawsystem.This study focuses on the role and position of law of government in internationalproject financing and develops along the line of discussing the activities thegovernment always participates in. Combined the current situation of projectfinancing in China, the author explains the history of project financing and contrastthe relevant theories of it. Thus, she analyzes the position of government in law andits various roles in every stage of international project financing.Firstly, the study gives a clear statement to general situations of internationalproject, which gives the background to the following discussion. Then, it lays specialemphasis on explaining the close relationship between project financing and thegovernment from the root by analyzing the process and theory of its development.Thus, it puts forward a general view that the host government of project is a “copartner” or a “leader” in project financing. Moreover, the study tries to illustratethe main activities the government adopts commonly and discuss relevant problemsdeeply and systematically. Its illustration develops in four aspects: the a preferentialpolicies attaching in the project financing, the promise and guarantee of governmentin the guarantee structure of project, the common supporting measures of governmentand the macroscopic environment of law and system in the country. Finally, itaddresses something that the government should deal with great caution and improvein the future.Aiming at deepening the understanding of project financing, which is relevant toa large mount of money, high risks and great international impacts, the studydemonstrates how the host government of project financing could find the rightposition and measures to protect it from countless risks as much as possible in aobjective and overall way.In a word, the author holds firmly that the way to ensure the government couldpromote the project financing and ease the harm may be caused to the policy and law,economy and finance of the country is clear. That is make sure the position in law ofthe government, strengthen the supervising and planning of its behaviors and regulateits roles in every stage of the project financing.