PT  - JOURNAL ARTICLE
AU  - Richard Klompjan
AU  - Marc J.F. Wouters
TI  - Default Risk in Project Finance
AID  - 10.3905/jsf.2002.320283
DP  - 2002 Oct 31
TA  - The Journal of Structured Finance
PG  - 10--21
VI  - 8
IP  - 3
4099  - https://pm-research.com/content/8/3/10.short
4100  - https://pm-research.com/content/8/3/10.full
AB  - Understanding default risk in project finance is relevant to investors. This article investigates which factors are most strongly associated with the occurrence of project finance default, using data from 210 projects, of which 37 were in default. The authors found that the use of proven technology, a sponsor with experience, a high debt service coverage ratio, and the absence of commercial risk cover are associated with lower default risk. The article also provides further insights into the relationships among the factors associated with default risk, and it discusses managerial implications for managing project finance default risk.