Banking · Project Risk Management
In project financing, 'Operational Risk' is a significant post-COD (Commercial Operation Date) concern. This risk primarily refers to the possibility that:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The project sponsors are unable to provide a bank guarantee for the mobilization advance.
- 2The project's technical performance or maintenance costs deviate negatively from projections, reducing the cash flow available for debt service.✓
- 3Changes in government regulations will lead to the expropriation of project assets.
- 4The project fails to secure the necessary environmental clearances before construction begins.
Correct answer
The project's technical performance or maintenance costs deviate negatively from projections, reducing the cash flow available for debt service.
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