PROJECT FINANCE MANAGEMENT IN THE CONDITIONS OF THE GLOBALIZATION OF THE INTERNATIONAL ECONOMY

The infrastructure deficit in developing countries is vast and current developmental initiatives fail to meet the requirements. There is a need for housing, clean water, sewerage facilities, transport and telecommunications infrastructure. The development of infrastructure requires large amounts of funding, which could be a project or non-recourse finance. The levels of project finance allocated to developing countries are much smaller compared to the developed world. The purpose of this paper is to determine the critical success factors for accessing project finance for infrastructure development in a developing country, Zimbabwe. This study employed the quantitative approach using a survey questionnaire to address various aspects that are important when lenders advance project finance. The questionnaire was distributed to participating organizations comprised of lenders, borrowers and investors with the higher numbers being borrowers. These organizations include banks in Zimbabwe that offer project finance for infrastructure, Pension funds which invest in infrastructure, Multilateral agencies operating in Zimbabwe, and Municipalities of major cities in Zimbabwe. The interrater reliability of the individual factors was calculated. Also, the aggregate interrater reliability for the different attributes was determined using Cronbach's alpha value. A total of 33 factors under five attributes were identified: governmental, financing, project, special purpose vehicle, and politics and economics were identified as being critical for accessing project finance. These factors were ranked according to their significance index or importance. Only 12 factors were considered as extremely important as critical success factors for project financing in Zimbabwe. The contribution of this study is to provide government, project finance agencies, private sector and other stakeholders interested in infrastructure projects with a list of the most important critical success factors for infrastructure projects in a developing country.

Infrastructure plays an important role in supporting economic growth and competitiveness of a country, and well-developed infrastructure is often considered as the foundation for economic growth (Abdurraheem & Naim, 2018); (Amel et al, 2020). Infrastructure investment and economic growth are interrelated, because infrastructure improvements will have an impact on increasing economic growth, which in turn will encourage infrastructure investment (Selim et al, 2019). Infrastructure projects have a very large scope, long time span, and involve many stakeholders, and the need for investment in infrastructure also becomes less liquid (Mohamad, 2015). Infrastructure projects have two important characteristics that must be considered in terms of financing. The first is the long-term investment period and the second is the high cost involved in infrastructure projects (Manzoor et al, 2017). Most large-scale infrastructure projects are financed non-recourse to the sponsoring companies, this type of financing is commonly known as project finance (Camacho, 2005). Project finance has been implemented globally in infrastructure financing both in developed and developing countries. The current condition faced by developing countries, besides the high investment value required and short-term for financing in infrastructure development are the high interest rates (United Nations, 2021). Project finance with a sharia scheme (Islamic project finance) is expected to be one of the best alternatives in overcoming infrastructure financing problems. Sharia financing is the most appropriate instrument for infrastructure financing because the basic asset is the project itself that it can be used as a method for financing infrastructure investment (Abdulkareem & Mahmud, 2019) and other activities that are prohibited by Islamic finance principles (Rarasati et al, 2013). Keywords: Infrastructure; Long-term Investment; Project Finance; Sharia Scheme; Sukuk.

Project financing has grown in popularity and monetary volume over the last five years, partly because of the budget cut backs in major oil companies, and partly because of the attractive terms offered by the, lending institutions. Many companies mistakenly view project financing as a lower cost source of funds, making previously marginal prospects justifiable using standard evaluation procedures. The costs and risks to the borrower are illustrated in this paper, and shown to be much larger than typically incorporated into most evaluations. A methodology is developed and illustrated to incorporate cost/risk consequences into the project financing decision.

The article reveals the peculiarities of the use of bank project financing in the field of PPP. It is substantiated that the peculiarity of the application of PPP project financing is the creation of a special project company, which is responsible for mobilizing financial resources for project implementation; the presence of a hierarchy of investment; more objective assessment of the borrower's solvency and reliability and evaluation of the project itself in terms of its efficiency, security and risk; significant transaction costs to settle the interests of all members of the partnership. It is proved that in modern conditions the role of project bank lending in the sources of project financing is growing rapidly, and the role of banks in this process is much wider than in traditional forms of lending. They not only provide financial support for the project, but also become direct participants in the implementation of the PPP project, performing management, settlement, consulting, guarantee and other functions. Given the specifics of PPP projects (large scale, long implementation time, cost), the participation of commercial banks in their financing is complicated. International development banks and international financial institutions play a leading role in the formation of project financing in the field of PPP, and the syndicated lending mechanism is also used in foreign practice. However, in Ukraine, bank project financing is practically underdeveloped, which is due to its institutional and legal irregularities. The use of syndicated lending mechanisms in Ukraine is unique, as well as the financing of PPP projects through credit and export agencies. PPP project financing with the support of international financial institutions, in particular the EBRD, has been the most developed, concentrating in such areas as infrastructure development, energy reform, and construction. In this regard, the problems of economic, legal and managerial nature, which hinder the development of bank project financing in the field of PPP in Ukraine in modern conditions, are outlined.

Purpose. The aim of the article is to investigate the problem of investment risk management in the project financing system. Methodology of research. The methodological basis of the study is the dialectical method of scientific knowledge. General scientific and special methods are used in the process of research, namely: abstract and logical, deductive and system analyzes – in the study of the peculiarities of project financing implementation; problems of management of investment risks in the project financing system; substantiation of ways of activation of development of project financing in Ukraine. Findings. A literary review and analysis of modern approaches to defining the concept of “project financing” have been carried out. The problematic aspects of the development of project financing in Ukraine are identified and the most common instruments for neutralizing investment risks in project financing are analyzed. According to official statistics, a significant proportion of business entities are found to be operating at a loss or low level of profitability, which negatively affects their creditworthiness and limits access to bank lending. In such circumstances, an important way out of this situation is to activate the development of project financing. Project financing, taking into account investment risks, can be provided by reliable financially sound banks, which have effective risk management, long-term resources, highly qualified specialists in financial investment analysis and consulting. Originality. The reasons for insufficient distribution of project financing in the banking sector of Ukraine have been identified and the directions of its activation have been proposed. Practical value. The findings of the study, which are expressed in the conclusions and proposals, contribute to solving the problem of improving investment risk management in project financing. Key words: project financing; project risks; investment risk; investment climate; investment risk management.

Despite development and extension of different ways of financing in financial markets, encompassing Islamic and conventional financing, the mechanism of Electronic Funds Transfer (EFT) of project financing both as borrowed and non-borrowed methods has not been considered at most. Moreover overall IT infrastructures development namely Real Gross Settlement System (RTGS), Automatic Clearing House (ACH), Scriptless Security Settlement System (SSSS) and International Bank Account Number (IBAN) for authentication process and the international meta bank network of Single Euro Payment Area (SEPA) and also international integrated banking networks including the Society For Worldwide Interbank Financial Telecommunication (SWIFT) and Interbank Information Transfer Network (Shetab), and other accomplished endeavors are not efficient in absorbing international contributions for project financing through foreign exchange funds in the different countries, satisfactory E-Payment mechanism in informative portal systems for investment projects are weak. In this way, the role of applying E-Payment systems for attracting foreign investment through retail resources mobilization and design of financial instruments with the capability of transacting in the secondary markets should be reconsidered. In this paper by having a glance at different types of investment project financing, we introduce a new project financing mechanism based on E-Payment with non-usury financial instruments to complete investment project financing chain in the form of Rastin Profit and Loss Sharing (PLS) banking.Sharia compliance of financing instruments in one side and accessibility in absorbing international retail foreign exchange sources on other side are two fundamental discussible items in this paper. In this way by designing a new system of "Non-Usury Scriptless Security Settlement System" (NSSSS) with non-usury mechanisms -avoiding legislative (Sharia) circumvention- can provide the two cited goals in designing non-usury financing instruments through IT-based non-usury financial innovations which includes of Rastin Certificates in Rastin PLS banking, and Non-Usury Bonds namely Rastin Swap Bonds.

International Political Economy and the Environment

Развитие туризма и индустрии гостеприимства являются одним из приоритетных направлений национальной политики России. В статье проанализированы показатели оценки реализации национального проекта «Туризм и индустрия гостеприимства». Анализ кассового исполнения федерального бюджета по федеральным проектам, входящим в национальный проект «Туризм и индустрия гостеприимства» показал, что финансирование всех проектов проводится на высоком уровне, средний процент исполнения составил от 93,7% по ФП «Совершенствование управления в сфере туризма», 95,5% по ФП «Развитие туристической инфраструктуры», до 99,8% «Повышение доступности туристических продуктов». С 2021 по 2024 гг. доля туристической отрасли в валовом внутреннем продукте возросла на 0,2%, по оценкам данный рост продолжится и должен будет достигнуть 5% к ВВП в 2030 году, количество туристических поездок в соответствии с планом должно возрасти на 56,4 млн ед. В статье рассмотрены направления реализации национального проекта «Туризм и индустрия гостеприимства», обоснована необходимость цифровизации туристской отрасли, а также мониторинг реализации мероприятий национального проекта. Материалы статьи могут быть полезны всем, кто занимается изучением финансирования федеральных проектов в туризме и индустрии гостеприимства. The development of tourism and the hospitality industry is one of the priorities of Russia's national policy. The article analyzes the indicators for evaluating the implementation of the national project "Tourism and the Hospitality Industry". An analysis of the cash execution of the federal budget for federal projects included in the national project "Tourism and the Hospitality Industry" showed that the financing of all projects is carried out at a high level, the average% of execution ranged from 93.7% for the "Improvement of management in the field of tourism", 95.5% for the "Development of tourism infrastructure" to 99.8% "Increasing the availability of travel products". From 2021 to 2024. the share of the tourism industry in the gross domestic product increased by 0.2%, according to estimates, this growth will continue and will have to reach 5% of GDP in 2030, the number of tourist trips in accordance with the plan should increase by 56.4 million units. The article examines the directions of the implementation of the national project "Tourism and the hospitality industry", substantiates the need for digitalization of the tourism industry, as well as monitoring the implementation of activities of the national project. The materials of the article can be useful to anyone who studies the financing of federal projects in tourism and the hospitality industry.

The main objective of this paper is to examine Trump’s foreign policy in the context of economic globalization from the perspective of international economics, which is carried out through documentary analysis. The main research question is: What is Trump’s foreign policy in the context of economic globalization from the perspective of international economics? The results show that the American political space has become extremely polarized and partisan after Trump came to power. Democrats and Republicans have become increasingly inflexible on many issues. As a populist president, Trump faces increasing demands from the public, mainly Republican voters, on the economy, and this has made the domestic environment of America increasingly important to Trump, to the point where some have called it a new isolationist policy in America. Trump's foreign policy is based on self-interest. He prefers self-interest and economic nationalism to the globalization of the international economy, and views economic globalization with skepticism. Trump does not pay attention to economic globalization, and under the pretext of nationalism, he is canceling or reforming some trade agreements. Trump is opposed to the establishment of a liberal order in America and seeks to end it, believing that the global economy is not beneficial to America, and he seeks to fundamentally redefine America's national interests. Trump's protectionist policies will worsen the situation in the world economy. This policy will affect the international monetary and financial system.

Financial constraints over the traditional sources of funds, coupled with increasing demand for infrastructure have forced the governments of developing countries to seek Private Participation in Infrastructure (PPI) development. As such Project Finance (PF) modalities such as BOO/BOT and its variants are found to be the most commonly adopted ones for private Power Projects (PPs). However, a critical look into the economic impact of alternative financing mechanisms for infrastructure is still required, although much has been written on the evaluation of PPI. This paper examines broader economic implications originating from five basic channels associated with PF transactions in private PPs. To achieve this objective, an analytical framework with theoretical foundation is developed to review empirically evidence of BOO/BOT type PPs. While economic cost factors reflect characteristics of PF and have bearing on the direct parties to the transaction, economic benefits of PF for PPs seem largely attributable to the host country. Findings further reveal that domestic financing, institutional support and proper balancing of the implications of PF mechanisms could mitigate the negative impact on the price of private power on many consumers. Limitations in achieving sustainable private power generation are largely attributable to the absence of more effective reforms to facilitate PF transactions in host countries. Read More: http://www.worldscientific.com/doi/abs/10.1142/S160994510200021

The article explores the financial aspect of managing regional development projects in the context of strategic planning and socio-economic challenges. Particular attention is paid to project financing, their role in investment incentives for regions, infrastructure modernization and human capital development. The object of the study is practical mechanisms for financing projects aimed at the socio-economic development of regions. The authors analyze the main sources of funding, the role of the State Fund for Regional Development (SFRD), and co-financing mechanisms from local budgets. The authors consider the impact of project financing on regional development, taking into account current economic and social circumstances, including military challenges. Particular attention is paid to the strategic management of financial resources, which allows achieving long-term sustainable development of territories and reducing territorial disparities. The model of regional development project management has been improved, reflecting a systematic and strategic approach to the financial support of regional initiatives, with a focus on efficiency, transparency, multichannel financing, risk management, and institutional capacity, which ensures its adaptability to the challenges of modern regional policy. The proposed approaches can be used as a basis for the development of regional development strategies focused on achieving social justice and economic efficiency. Analyzing the research of scholars, it has been found that most of them focus on the need to attract alternative sources of funding. This will increase the financial capacity of local budgets by 20–30% compared to traditional approaches. Some models of interregional financing adapted to the conditions of Ukraine demonstrate a 25% increase in resource efficiency due to the digitalization of infrastructure project management. The article also emphasizes the importance of cross-sectoral cooperation and partnerships between the public, private and civil society sectors in project financing. The presented results are of practical importance for local governments, think tanks, and regional development policymakers. In the context of European integration processes, the application of the best European practices in financial management at the regional level is becoming increasingly important. The implementation of innovative financial instruments can enhance the adaptability of regional systems to external shocks. The results of the study can serve as an analytical basis for further scientific developments and implementation of effective state regional policy.


 Project financing is one of the priority tools for stimulating the country's economic growth around the world, which allows the implementation of large-scale and capital-intensive projects, providing favorable credit conditions with insufficient creditworthiness of the project beneficiaries [1].
 As a rule, project financing instruments are long-term (10-30 years, depending on the type of transaction), so this asset class is interesting for the implementation of the task of building long-term models for assessing credit risk associated with the introduction in 2018 of the new international financial reporting standard IFRS 9 "Financial Instruments".
 The new standard requires financial institutions to calculate their expected credit loss (ECL) at the time of granting loans and other banking products exposed to credit risk [2], taking into account different time horizons, which significantly changes the traditional approaches to assessing credit risk by commercial banks [3], [4].
 As part of this work, a model was built to assess the long-term probability of default for the portfolio of assets of a Russian commercial bank belonging to the project finance segment in accordance with the requirements of the International Financial Reporting standard IFRS 9 "Financial Instruments". At present, the topic of this work is extremely relevant and may be of interest both for commercial banks that are faced with the problem of improving credit risk assessment models

This study is about project analysis and financing. Project analysis is concerned with identifying and assessing the value-enhancing potential of individual investment opportunities. Project financing in its broadest sense encompasses all sources of funds used to finance project investments. It thus includes equity and debt, straight bank loans and bonds as well as non-or limited recourse financial structures, again either bonds or bank loans. It is the latter, narrower class of liabilities that forms the core of the present study.

Global project finance investments have become one of the primary funding mechanisms for large infrastructure projects worldwide over the past few decades. This paper examines the country-level dynamics of global project finance loans from 1981 to 2018, using data from all project finance deals reported in the DealScan database. Our analysis reveals that most international project finance loans originate from banks and financial institutions in advanced democracies, while the recipient countries vary widely in terms of regime type and economic development. Through systematic visualization and statistical analysis, we find that transnational capital flows for infrastructure projects are more likely to occur between countries with similar political systems or between those with starkly different regimes. This finding indicates significant lending and borrowing between full democracies and closed autocracies, suggesting that investments raised in liberal democracies enable some of the most closed dictatorships to finance their infrastructure development. The study suggests that closed and repressive regimes might substantially benefit from the globalized project financing system, warranting increased attention from scholars in International Political Economy on political implications of the globalized project finance market.

В настоящее время многие экономисты рассматривают финансы, чуть ли не как главный источник экономической нестабильности и даже социальной нестабильности в целом. При этом у всех отраслевых элементов финансовой деятельности имеются аналоги из «реального» сектора экономики, менее «опасные» для экономики, чем первые, и в мире, в том числе в нашей стране, идет активный процесс замещения первых вторыми. В этих условиях чрезвычайный интерес представляет анализ с точки зрения экономики без финансов такого относительно нового инструмента финансирования проектов, как краудфандинг, или народное финансирование, осуществляемое на основе современных информационно-коммуникационных технологий. Краудфандинг рассматривается как альтернатива традиционному «финансовому» финансированию проектов, т. е. финансированию, осуществляемому через финансовых посредников (банки, биржи и т. д.). Но при этом краудфандинг лишь в определенной части, хотя и весьма значительной, является «финансовым» методом проектного финансирования. Отдельные его виды, а именно краудфандинг за нефинансовое вознаграждение, с которого, собственно говоря, и начался краудфандинг, и краудфандинг за роялти, выступают «нефинансовыми» инструментами финансирования. Важно отметить, что такие финансовые виды краудфандинга, как краудинвестинг и, главное, краудлендинг, занимающий основную долю крудфандингового рынка, могут быть трансформированы в нефинансовые аналоги путем замены договоров об участии в капитале и о кредите договорами о совместной деятельности, партнерстве и т.д. При этом у такой трансформации имеются значительные перспективы, поскольку факторами, сдерживающими развитие краудфандинга, как раз являются «финансовые» подходы к финансированию проектов Currently, many economists consider Finance almost as the main source of economic instability and even social instability in General. At the same time, all sectoral elements of financial activity have analogues from the “real” sector of the economy, less “dangerous” for the economy than the first, and in the world, including our country, there is an active process of replacing the first with the second. In these circumstances, the analysis from the point of view of the economy without Finance of a relatively new instrument of project financing, such as crowdfunding, or people’s financing, carried out on the basis of modern information and communication technologies, is of great interest. Crowdfunding is seen as an alternative to traditional “financial” project financing, i.e. financing through financial intermediaries (banks, exchanges, etc.). But at the same time crowdfunding only in a certain part, although very significant, is a “financial” method of project financing. Some of its types, namely crowdfunding for non-financial remuneration, which, in fact, began crowdfunding, and crowdfunding for royalties, are “non-financial” instruments of financing. It is important to note that such financial types of crowdfunding as crowdinvesting and, most importantly, crowdlending, which occupies the main share of the crowdfunding market, can be transformed into non-financial analogues by replacing agreements on participation in capital and on credit with agreements on joint activities, partnership, etc. At the same time, such a transformation has significant prospects, since the factors hindering the development of crowdfunding are “financial” approaches to project financing