MITIGATING COMPLETION RISK IN INTERNATIONAL PROJECT FINANCE – A COMPARATIVE LAW PERSPECTIVE AND PRACTICE
Sung Hyun Hwang*
Legal Counsel, GS Engineering & Construction Corp
This article explores risk mitigation in international project finance to ensure the bankability of a project. It focuses on completion risk, which is considered the most critical risk, and examines contractual mechanisms for its mitigation, along with relevant legal issues from a comparative law perspective. Given that contractual mechanisms in international project finance have primarily evolved from common law practices, the article intends to highlight the importance of viewing such contractual mechanisms with a comparative law perspective to comprehend their meanings and purposes correctly, and to identify modifications that may be necessary due to the differences between common law and civil law.
Infrastructure changes lives by connecting people to opportunity. In the world, there are still 840 million people living more than two kilometres from all-weather roads, one billion people lacking electricity, two point two billion people lacking safe drinking water and four billion people lacking internet access.1
Project finance can help address this problem by providing private sector funds and technologies to develop infrastructure. Increasing use of project finance is premised on the idea that quality infrastructure contributes to economic growth and improves people’s lives, thereby providing more opportunities to people.