Project finance risk evaluation of the Electric power industry of Serbia

Dragana MakajiÄ NikoliÄ, Sandra Jednak, SlaÄana BenkoviÄ and Vladimir PoznaniÄ

Energy Policy, 2011, vol. 39, issue 10, 6168-6177

Abstract: From the aspect of the development of a country, the energy sector represents a domain of strategic interest. Generation and use of energy resources most often belongs to the public sector, and are most often under the influence of the government in most countries. This paper analyzes the risks that are characteristic to the business of the public enterprise, Electric Power Industry of Serbia (EPS). EPS has started its restructuring and is adjusting to changes and challenges imposed by the launched reforms in the energy sector. However, due to certain limitations, it is still not possible to implement its complete restructuring and modernization. The paper aims to point at the risks a potential strategic partner faces. The risks have been identified as commercial, financial and political, classification immanent for project finance, and their evaluation was done using Failure Mode and Effects Analysis (FMEA). Risk analysis was performed based on current conditions for two potential scenarios that predict different types of changes in the analyzed period. The results of the analysis show that the potential strategic partner should pay special attention to price risks, estimation, investments, project activity neglect, quasi-risks and debt collection.

Keywords: Electric; power; industry; Project; finance; risk; FMEA (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (5)

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