chapter  12
14 Pages

Chinese and Korean Contractors in Large Project Finance Transactions

This chapter looks at some of the challenges facing project financing's in emerging markets where, given the current economic and financial environment, governments face significant challenges to finance projects. It also highlights some of the actions governments can take to ease investor reticence and attract project financing. Governments wanting to include private financing in their development plans will need to invest time and effort into laying the right foundations by establishing a clear policy rationale, a legal framework, an investment framework along with a well-organized operating framework. When considering a project finance investment, lenders will want to examine the legal framework where the project will operate and ensure the effectiveness of long-term contracts. Project financing requires the long-term contractual relationships that make up the project and the outputs needed from the project be clearly established from the start. Equity plays a useful role in absorbing project risk and facilitating debt funding.