do not; typically in a successful project, the gross rate of return on the equity is at
least twice that on the debt, which reflects the different risks taken by investors and
lenders. As the ability of the Project Company itself to absorb equity risk is lim-
ited by the low level of its equity, this may mean in some cases transfer of risk
from the Project Company to the Sponsors (cf. §8.12).
§8.3 ANALYSIS OF COMMERCIAL RISKS
The main questions considered in the commercial risk analysis process can be
summarized as:
• Commercial viability: does the project make overall sense? (cf. §8.4)
• Completion risks: can the project be completed on time and on budget?
(cf. §8.5)
• Environmental risks: does the project face any environmental constraints in
construct ...