Abstract
The aim of this work is the development of a mechanism for minimizing the risks of project financing. The article offers a methodology to reduce potential risks of financing investment projects. Methodology includes such basic steps as a sensitivity analysis of the project's net present value to changes in key financial and economic parameters of its realization. The method used is based on the scenario approach: expert evaluation of the relevance of project-specific risks, calculation of integrated risk evaluation and development of recommendations on the prevention of the most significant for the particular variant of project financing risk. In General, the proposed method allows, on the basis of the sensitivity analysis and synthesis expert estimation, highlight the most significant risks of project finance and develop activities to minimize them in the future. The proposed methodology has been tested on real production development project financing Ltd.
Highlights
The most important factor affecting the decision of the investor, is the level of risk associated with an investment in an investment project
In General, the proposed method allows, on the basis of the sensitivity analysis and synthesis expert estimation, highlight the most significant risks of project finance and develop activities to minimize them in the future
In the minimization of the risk of a possible reduction of the operating income includes the following main activities: active work with major customers; long-term contracts for the supply of woodworking products at fixed prices; a more active market research; strengthening participation in State and municipal order as potentially effective channel of saling of products of plant
Summary
The most important factor affecting the decision of the investor, is the level of risk associated with an investment in an investment project. The uncertainty and risk identification, quantitative and qualitative analysis of risk, monitoring and verification remain relevant at each stage of the preparation and realization of investment projects. The first attempts to assess the risk arose at the beginning of the century. In 1921, the Knight invited their qualitative analysis in the context of the theory of finance (Knight, 1921). Practical interest for forecasting and risk assessment began in 1929 year in connection with the global economic crisis, Dow introduced the theory of the cyclical movement of the exchange rate value of the securities. A new surge of research on this topic occurred in 1952, when Markowitz suggested a method of risk when choosing investment strategies (portfolio theory) (Markowitz, 1952)
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