Risk Assessment
Risk assessment is the most important aspect of the project development, implementation and operation stages. Project risk is generally evaluated by all the concerned parties such as: a) project developer, b) equity investor,c) lender, d) equipment supplier etc. on their own way protecting their interest. Different parties look at the risks in their own perspective before making a decision.
Risks can be minimized in many different practical ways. It can be done by adopting different technical options, by allocating the cost of the risk to the project budget, by contractually transferring the risks to another party or by buying insurance against the loss, if the risk should materialize.
The character of the risk will change over time as the project develops. It is important that the project management continuously monitors the identified risks and takes necessary steps. Following are some of the risks that need to be studied thoroughly:
• Feasibility study (consultant qualification)
• Feasibility study (technical, financial assumptions & projections)
• Technology
• Investment cost overruns
• Operating cost overrun
• Operation & Maintenance
• Fuel supply
• Competition for the fuel
• Fuel price
• Fuel quality
• Demand for output
• Force majeure
• Construction contractor
• Delay
• Non-completion
• Accident/loss
• Site availability
• Licenses and permits
• Failure to meet performance specification
• Availability
• Political
• Currency
• Interest rate
• Inflation
• Cash flow
• Environmental
• Management performance
For services related to risk assessment, contact us.