Study On Large-scale Project Financing Risk Management

In project financing, project assets, expected earnings and equity are collaterals. It is different from the traditional financing, in recent years in developing countries, especially used in the continuous application of large engineering project construction, and cause people to think about risk prevention. Project financing has a unique advantage of limited recourse. But it also has its demerits. Long-time negotiation, a wide variety of involved parties and complicated structure lead it to being 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, Large-scale 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. In most cases, people think risk arrangement or risk control as risk management by mistake, so it is worth exploring the risk management of Large-scale Project Financing in China and it is also very meaningful to analyze and solve our current problems in risk management of Large-scale Project Financing.This thesis not only gives the general description on basic concept, usual practice of project finance and risk management, but also provides the case studies to illustrate the main risks in China. In terms of risk assessment, combing qualitative and quantitative, the thesis establishes the index system of project financing risk factors. Combing financing evaluation and dynamic fuzzy evaluation method, the thesis uses the combination on the sample project to evaluate the project financing risk. Then, in view of these risks, the thesis puts forward the risk control scheme. The thesis also notices that it is hard to utilize the advanced management tools in China and it mainly results from policies, laws, approvals, managing skills and some objective conditions. Based on detail analysis, the thesis gives resolutions and relevant suggestions. The results in this paper have been applied in the sample project. They can provide a reference for the comprehensive evaluation of other project financing risk and risk management etc.