Evaluation Of A Project And The Developer

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During the early steps of the projects until reaching commercial and financial close, the parties initiating the project and the developer will have to make critical decision to structure the project. An important part of the negotiation will focus on the risk allocation to the various stakeholders of the project in order to satisfy the prim objectives and drivers of the parties involved and distribute the risk to the party most able to manage and bear them.
The risk allocation will require some transfer of risk ownership between the parties developing the project and third parties or other stakeholders in order to assign the risk identified to the party in the best position to deal with it. This should take in consideration the nature of
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In this regard, the recent researches and academic works tend to suggest some adjustment to the risk allocation between the main parties – public and private – in order to achieve value for money in the provision of a service.

Risk allocation in connection with the individual perspectives, goals and requirements of the various project stakeholders
In the structuring phase of a project, the developers, whether directly or with the assistance of a mandated advisor will develop a network of contract supporting the project initiative. If the project is based on non-recourse finance or limited recourse, the developer will aim to set a Special Propose Company initially bearing all the risks involved in the project. Then, a set of contract to provide the main components of the project purpose – delivering a service required by the public sector. For merchant project (service not required or tendered for the public service), most of the consideration below will apply but the public entity will be substituted by the market needs. In this situation, the private sector will directly contract with the SPV which is a private entity for the delivery of a service.
The developer and later the SPV will aim to allocate all the risk identified to third party involved in the project through contract terms agreed for the scope of supply of the various contract. The main transfer of risks are achieved via the key contract intending to secure the
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