Financial Risk and its Mitigation

19 Pages Posted: 24 Apr 2014

Date Written: April 19, 2014


Project finance is the preferred financing mechanism for large infrastructure projects that are essential for developing countries, emerging economies, and developed countries alike. For decades, project finance has been the preferred form of financing for large scale infrastructure projects worldwide. Several studies have emphasized its critical importance, especially for emerging economies, focusing on the link between infrastructure investment and economic growth. Over the last few years, however, episodes of financial turmoil in emerging markets, the difficulties encountered by the telecommunications and energy sectors and the financial failure of several high-profile projects have led many to rethink the risks involved in project financing. This research paper will define project finance and risks associated with project finance. It provides insight into the future of project finance.

Suggested Citation

Kumar, Leela, Financial Risk and its Mitigation (April 19, 2014). Available at SSRN: or

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