Abstract for: An Inquiry into the Understanding of Risk Characterization of Mega-projects for Project Financing

This paper discusses our approach to characterizing and quantifying risk of large projects from a perspective of project finance requirements. We suggest a causal modeling and system dynamic simulation framework to understand project behavior and to distill it into component risks, their interactions and their effect on project risk premiums. We then argue that adoption of such a framework can have a transformative impact on mega-projects and the markets for project finance in developing countries.