TYPES AND SPECIES OF PROJECT FINANCING RISKS

Abstract

The article is devoted to deepening the theoretical foundations of project financing risks and developing proposals for their systematization in accordance with types and types. The need to curry out this investigation consist in the fact that investment projects to which the project financing methodology is applied are capital-intensive and long-term, and high-risk. The importance of the issue for identifying the risks in an investment project is determined by the fact that the project is probabilistic in nature, and the attracted financial resources are significant and limited. It has to comprehend that the sooner possible risks are identified, the sooner it will be possible to reduce the level of their negative impact on the project. Discussions going on in the scientific community on the classification of project risks actualize certain issues, but the lack of scientific work in Ukrainian sources on determining the types and species of project financing risks proves the need for investigation in this direction. To identify specific signs of project financing risks, methods such as comparative and critical analysis, generalization and abstraction, induction and deduction were applied. It was found that in order to identify the characteristic signs of project financing risks, it is necessary to proceed from the fact that these most prevalent project risks impact the ability to receive certain incomes that will be able to cover the costs of the project on the invested capital and, accordingly, bring profit. A generalized classification of project financing risks was developed, taking into account the phases of the life cycle, sources of financing, and the level of feasibility of the project, the nature of detection, the level of significance and risk tolerance of the project. The mutual influence and interdependence of risks were investigated and various examples of its detection were considered. Types of risk by areas of project financing were proposed, taking into account certain management processes, with the identification of the species of risks that correspond to the type determined by them. Each of the above types of risks were considered through the prism of problem areas that impact the occurrence of risks in accordance with the defined type. The developed classification of project financing risks allows not only to deepen their theoretical foundations and carry out a multi-faceted analysis, but also to choose the appropriate tools of influence.