Principles of Project Finance

Lenders therefore prefer overseas Reserve Accounts for projects in coun-

tries with poor credit ratings, but this may be difficult in countries with strict ex-

change controls, where domestic companies are not allowed to have such accounts

(cf. §7.4.2).

§10.4 EXPROPRIATION

A government always has the power and right to take over privately owned as-

sets temporarily where this is necessary for reasons of national security (for ex-

ample, states requisition ships and aircraft in time of war). Many countries have

also legislation that gives powers to take over or direct the actions of privately con-

trolled utilities, or divert oil or other fuel supplies, to maintain essential services.

Any investor or lender takes this risk, and in any case the government ...