Financing infrastructure projects entails a formidable set of risks. It is the role of the project finance advisor, the project sponsor and other participants to structure the financing in such a manner as to mitigate these risks. The project finance advisor’s role is to carve out the risks, assigning them to the parties best suited to control them.

You have been appointed finance advisor for a prospective hydropower project. Identify five key risks that the project faces, allocate the respective risks to parties best suited to manage them and discuss the key measures needed to control the identified risks.