On the development of methods for assessing project financing risks

Abstract

The introduction of new methods for industrial infrastructural development and the methods of financing has led to the emergence of a promising direction - project financing. The development of project financing in the Russian Federation is primarily associated with a change in legislation, within the framework of which a system of escrow accounts was introduced in order to preserve the funds of equity holders. The gradual transition from the traditional equity participation scheme to project financing should contribute to the development of the construction industry, increased business activity and an increase in construction volumes. However, the limiting factor in the development of this area is the high risks for all participants in the investment and construction process and the lack of an effective method for assessing the risks of project financing. The development of this method is complicated by the fact that along with the general and characteristic risks of all investment projects, each project has its own characteristics, specific contractual and financial structure and implementation conditions and is associated with industry and regional risks inherent in this particular project. In this regard, the development of methods for assessing the project financing risks is one of the tools for making timely management decisions on the part of the developer to optimize the investment and construction process. This will allow attracting additional resources to the investment and construction sector and increasing the volume of housing construction.

Developer status assessment based on its aggregate capacity estimation

“…The scientific literature currently presents a fairly extensive amount of research related to the risk assessment of investment projects, both from the point of view of the participants in the investment and construction activity, and from the position of the project life cycle, its sectoral focus, and other criteria [1 -9]. But despite the large number of works in this area, due to changes in the organizational and legal conditions of investment and construction activities, the transition to project financing, changes in the relations of the main construction participants, there is a need to develop methodological approaches to the assessment of project risks, which were considered in detail by the authors in previous papers on assessing its aggregate potential [10,11].…”