• Construction cost overrun (usually based on a full drawing of the contin-
gency funding)
• Payment of the LDs under the EPC Contract to cover delays or failure of the
project to perform as specified
• Delay in completion (say for 6 months) without LDs from the EPC Contractor
• Reduction in performance without LDs from the EPC Contractor
• Higher downtime or lower availability
• Reduced volume of sales or usage of the project
• Reduced sale prices
• Breakeven sales prices
• Higher input costs
• Higher operating costs
• Higher interest rates (where these are not yet fixed)
• Exchange rate movements
In summary, the sensitivities look at the financial effect of the commercial and
financial risk aspects of the project not working out as originally expected.
Lenders ...