Politics Institutions and Project Finance: The Dabhol Power Project Case Solution

This case study examines the development and financing of the Dabhol power plant in the state of Maharashtra in India. This project was controversial from the beginning, for three main reasons: the promoter (the Enron deceased) tried to minimize their capital commitment in the project, the economics of the project depended on the price of the product compared to high (subsidized) current prices, and the operations and financing of projects have not adequately protected from political interference. For practical reasons, it can be considered an example of financing business projects failed. This case examines in particular how the risks associated with the development of these projects in a politically unstable environment can be abused by developers and financiers. Its aim is, in principle, to illustrate the difference between operational risk management and to manage and mitigate project risks in an uncertain institutional framework.
by
Thanks Loo,
Paul Lejot,
Frederik Pretorius
Source: University of Hong Kong
13 pages.
Date Posted: March 19, 2008. Prod #: HKU707-PDF-ENG
Politics, Institutions and Project Finance: The solution of the case Dabhol Power Project

Politics Institutions and Project Finance: The Dabhol Power Project Case Solution
Share This