Abstract

A U.S.-based power plant provider is evaluating the prospects for a project financing of a turn-key power project in Tianjin, China. The prospective project financing agreement must be structured to assure cash flow capability, as well as to provide some protection against either blocked funds in China or foreign exchange risks of potential currency (Chinese renminbi) devaluation.

 

Teaching
This case is designed as a vehicle for discussing the fundamentals of project financing. It is intended to highlight the traditional risks inherent in projects and how project finance can be used to mitigate or manage these risks from the perspectives of the various parties to the project; both debt and equity providers.

Case number:
A06-97-0014
Subject:
Finance
Year:
Setting:
China, 1996
Length:
13 pages
Source:
Library case