Investment activity

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RISKS IN PROJECT FINANCE

Project risk is a number of risks which can prevent realization of investment project or reduce its efficiency (commercial, economic, budgetary, social, etc.).

Project participants risk is a risk of deliberate or compelled non-execution of their obligations. Project participants risks can be caused by lack of experience of participants, unstable financial position, insufficient insurance of project participants.

Cost over-run risk is a risk which can be caused by mistakes in the design, inefficient use of resources, changes of conditions of the project realization. It is one of the most common risks in the project activity.

Currency risk is a risk connected with the placement of funds in the currency assets and which is caused by changes of the exchange rate.

Temporary risk is a risk of purchase or sale of assets at unsuitable time which is certain to cause losses.