Financial Risk Control For Energy Company’s Project Financing

Energy security is very crucial for sustainable prosperous, improving people’s livelihood, keeping continuous stability of society. Facing the changing situation of supply and demand in energy sector, energy enterprise should take the historical responsibility to keep nation security and sustainable growth. National council promulgated 12th Five-Year plan regarding energy development on January 24,2013. The plan depicts the main goal for energy plan in 2015 as the following:double control the intensity and gross of energy consumption, moderately speed up to deploy energy production and supply, provide strong financial support, strengthen reconciliation between credit policy and energy industry policy, innovate financial products and services, provide convenience for diversity in energy investment, widen the financial channel for enterprises, improve the portion of direct financing for enterprise.With China’s rapid economic development and continuous financing demand for energy enterprise, project financing should be more widely used in China, as well as causes more complex risks. In addition, project financing applied very lately in china, and enterprises didn’t make sense of risk. As results, it is urgent thing to improve the level of financial risk control and make full use of project finance. The dissertation analyzed and classified financing risk, current situations, control environment, and existing external and internal problems of project finance for energy companies. Further, based on the experience of project finance risk control from other countries, the essay provided some solutions for China energy companies to effectively prevent financial risks and optimize internal control.The dissertation comprised six parts.In first part, the essay elaborates the research background and discusses the importance of research project financing for energy enterprise. And review the related published articles, summarize the theoretical progresses, identify the main contents of this paper, and build a basic research framework, including the innovation and the research theme next step.In second part, based on the first part, the essay discussed the related theory and summarized the basic theoretical framework. Further, the essay figured out definition, main models of the project finance, the difference compared with the traditional financing. In addition, the paper also depicted the project financing financial risk control theory, defined the risks and risk management, and as a starting to discuss the financial risk control and management for project financing.In third part, the essay analyzed the practical experience of financial risk control for project financing in US, Australia, Hong Kong and India, and given some lessons.In fourth part, the paper deeply analyzed the current situation, problems and causes of financial risk control for energy company’s project financing. Based on the previous analysis, followed the overview of existing financial risk control during project finance for energy companies.In fifth part, the essay analyzed the Cameron LNG case to elaborate the macro and micro factor that affect the financial risk control for project financing.In last part, the paper provided some suggestions from governmental and project corporation’s points, hopefully can give useful instruction for energy companies to prevent the financial risks from project financing.