ABSTRACT
The purpose of this chapter is to examine whether credit rating agencies, project finance lenders and political risk insurers play an active role in ensuring that stabilisation clauses are inserted in energy investment contracts. It should be noted that this chapter does not aim to analyse project financing from every perspective or in all its guises, as this would be beyond the scope of this research. However, the chapter aims to explain what project finance is and why it is used. Furthermore, this chapter asserts that there is a link between rating agencies, risk insurers and financial institutions, and that this triumvirate effectively facilitates the ability of an investor to back host states into a corner in order to make them agree to stabilisation clauses. Therefore, this chapter examines each of these entities in turn in terms of how they work and what requirements they impose in the context of an investment scenario. It goes on specifically to evaluate the role of these agents in the context of the BTC pipeline project. Examining the legal framework of the BTC agreement provides a real-life investment scenario where an assessment can be made of whether external factors have an influential role on investors and host states in the inclusion of stabilisation clause in a host government contract.
