Project Finance and Risk Modeling Using a System Dynamics Approach: A Toll Road Project

Malaysian Journal of Industrial Technology, 2:2 (2017) 86 93

8 Pages Posted: 8 May 2019

See all articles by Lukas B. Sihombing

Lukas B. Sihombing

University of Indonesia (UI) - Faculty of Economic, University of Indonesia (UI) - Department of Civil Engineering

Date Written: April 10, 2019

Abstract

In a build, operate, and transfer (BOT) scheme, as Project Finance (PF), equity investors are concerned about the adequacy of their returns. On the other hand, the timeliness of the project debt service payments focuses to the lenders. Consequently, an important role is played by PF and risk modeling to ensure that structure of the project management is a prerequisite. Nevertheless, the complexity of future infrastructure project will become more complicated. Not only will the limitations of stakeholders to understand others when evaluating a project will become more prevalent, but also the competition force the bidders to become increasingly innovative in their financing modeling. The aim of this paper is to propose a new technique to calculate project finance and risks using System Dynamics (SD) approach with sysdea modeling. The model builds confidence and its policy implications. This paper results is PF and risk modeling should use an SD approach in toll road projects.

Keywords: Build operate and transfer (BOT), Project finance modeling, Risk analysis, System dynamics, Toll road

JEL Classification: G11; R58

Suggested Citation

Sihombing, Lukas B., Project Finance and Risk Modeling Using a System Dynamics Approach: A Toll Road Project (April 10, 2019). Malaysian Journal of Industrial Technology, 2:2 (2017) 86 93, Available at SSRN: https://ssrn.com/abstract=3369392

Lukas B. Sihombing (Contact Author)

University of Indonesia (UI) - Faculty of Economic, University of Indonesia (UI) - Department of Civil Engineering ( email )

Kampus Baru
Depok, West Java 16424
Indonesia

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