{"id":13261,"date":"2020-03-19T15:15:09","date_gmt":"2020-03-19T13:15:09","guid":{"rendered":"https:\/\/modecon.mnau.edu.ua\/?p=13261"},"modified":"2020-03-19T15:50:10","modified_gmt":"2020-03-19T13:50:10","slug":"risks-of-project-financing-in","status":"publish","type":"post","link":"https:\/\/modecon.mnau.edu.ua\/en\/risks-of-project-financing-in\/","title":{"rendered":"Kovalenko Victoria. Risks of Project Financing in the Current Conditions of National Economy Development"},"content":{"rendered":"

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JEL Classification<\/strong>: G 18; G 20; F 21.<\/span><\/td>\nDOI<\/b>: https:\/\/doi.org\/10.31521\/modecon.V19(2020)-11<\/a><\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

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Kovalenko\u00a0Victoria<\/strong>, Doctor of Economics, Professor, Professor, Department of Banking, Odessa National University of Economics, Ukraine<\/p>\n

ORCID ID<\/strong>: 0000-0003-2783-186X<\/a>
\ne-mail<\/strong>: kovalenko-6868@ukr.net<\/a><\/p>\n

Risks of Project Financing in the Current Conditions of National Economy Development<\/h2>\n

 <\/p>\n

Abstract. Introduction<\/strong>. Transformation of economic relations determines the need for real investment, without which it is impossible to upgrade and expand the production potential of economic agencies and the production of competitive products and services.<\/p>\n

Purpose. <\/strong>The main purpose of the study is to deepen the theoretical and methodological foundations and to monitor the risks of project financing in the current conditions of the development of the national economy.<\/p>\n

Results<\/strong>. The article focuses on the problem of project finance market\u2019s development in the context of uncertainty and risk. The authors consider scientific views on project finance. The systematization of scientific views on the definition of \u201cproject financing\u201d has given the authors a possibility to establish the decisive role for banks, taking into account the requirements for the formation of the project itself, its support, risk evaluation and support. The theoretical foundations of project financing are determined, namely: the economic essence of project financing, features of project financing; functions of banks in the process of project financing; principles of its implementation, as well as subjects and objects of this process. The analysis of the current state of bank\u2019s project finance showed that the activity of domestic banks in the project finance market remains low. This is due to the negative impact of environmental factors such as unsatisfying market transformation\u2019s rates; the low level of development in the real sector; the weak and insufficiently transparent financial position of a large number of corporate entities; the underdeveloped of the stock market\u2019s infrastructure; uncertainties about the land market; the low level of protection for creditors\u2019 rights; the high country-risk. It is formed the scheme of sequential actions of a bank for deciding on project finance.<\/p>\n

Conclusions<\/strong>. The authors clarify the classification of project finance risks. Project finance risks include: credit risk, interest rate risk in the banking book, market risk, compliance risk and innovation risk. The necessity of introducing mezzanine lending to minimize project financing risks has been proved.<\/p>\n

Keywords<\/strong>: project financing, banks, project finance risks, investment project; mezzanine lending.<\/p>\n

References:<\/strong><\/p>\n

    \n
  1. Dzjubljuk, O. V. (2019). The role of the banking system in innovative economic development. Visnyk Ternopil\u02b9s\u02b9koho natsional\u02b9noho ekonomichnoho universytetu<\/em> , 1, 81-102 [in Ukrainian].<\/li>\n
  2. Lapko, O. O. (2017). Project financing as an innovative mechanism for the implementation of investment projects. Naukovi zapysky Natsional\u02b9noho universytetu \u00abOstroz\u02b9ka akademiya\u00bb, Seriya \u00abEkonomika\u00bb<\/em>, 4 (32), 165-170 [in Ukrainian].<\/li>\n
  3. Hasii, V. (2017). Some problems of development of project financing in Ukraine. Naukovyy visnyk Khersons\u02b9koho derzhavnoho universytetu<\/em>, 23, 3, 60-63 [in Ukrainian].<\/li>\n
  4. Shevchuk, Ja. V. (2018). Global dimension of project finance market development. Naukoviy v\u00edsnik Uzhgorods’kogo nats\u00edonal’nogo un\u00edversitetu<\/em>, 3, 151-158. [in Ukrainian].<\/li>\n
  5. Paranjuk, Ja. (2018). Modeling of procedures of evaluation of procedures of efficiency of innovative projects in conditions of risk and uncertainty. Visnyk Ternopil\u02b9s\u02b9koho natsional\u02b9noho ekonomichnoho universytetu<\/em>, 1, pp. 106-113 [in Ukrainian].<\/li>\n
  6. Kolesnikov, K. V., Stankovsjka, I. I., & Gherghanova, M. L. (2018). Information technology for discretizing the concept of \u00abrisk\u00bb in project management and programs. Visnyk NTU \u00abKHPI\u00bb, Seriya: Novi rishennya u suchasnykh tekhnolohiyakh<\/em>, 26 (1302), 2, 16-21. doi:10.20998\/2413-4295.2018.26.27 [in Ukrainian].<\/li>\n
  7. Brusser, P. (2014). Project financing. A selection of articles and materials for lectures MGIMO. Moscow: MGIMO [in Russ.].<\/li>\n
  8. Walter, G. (2017). The risks of project finance \u2013 based on international and domestic experiences. Public Finance Quarterly<\/em>, 4, 554-572.<\/li>\n
  9. Garcia-Bernabeu, A., Mayor-Vitoria, F., & Mas-Verdu F. (2015). Project finance recent applications and future trends: the state of the art. International Journal of Business and Economics,<\/em> 14(2), 159-178.<\/li>\n
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  11. National Bank of Ukraine (2020). Strategy for development of the financial market of Ukraine until 2025.<\/em> Retrieved from https:\/\/bank.gov.ua\/admin_uploads\/article\/Strategy_FS_2025.pdf [in Ukrainian.].<\/li>\n
  12. Global innovation index. Retrieved from https:\/\/www.globalinnovationindex.org\/.<\/li>\n
  13. National Bank of Ukraine (2020). Loans granted by deposit-taking corporations (except National Bank of Ukraine). Retrieved from: https:\/\/bank.gov.ua\/statistic\/sector-financial\/data-sector-financial#1ms [in Ukrainian].<\/li>\n
  14. Yeskomb, E. R. (2015). Principles of project financing. Moscow: Alpina Publisher [in Russ.].<\/li>\n
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  16. Ravis, J. G. (2013) Risk analysis paramount in project finance decisions. Natural Gas & Electricity,<\/em> 30, 4, 1-7.<\/li>\n
  17. National Bank of Ukraine (2018). On the organization of risk management system in banks of Ukraine and banking groups (Order No. 64, June 11). Retrieved from https:\/\/www.kmu.gov.ua\/ua\/npas\/250250456 [in Ukrainian].<\/li>\n<\/ol>\n

    [\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]Received:<\/strong> 22 February 2020<\/p>\n

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    Kovalenko, V. (2020). Risks of Project Financing in the Current Conditions of National Economy Development. Modern Economics<\/em>, 19(2020), 63-68. DOI: https:\/\/doi.org\/10.31521\/modecon.V19(2020)-11.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

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    [vc_row][vc_column][vc_column_text] JEL Classification: G 18; G 20; F 21. DOI: https:\/\/doi.org\/10.31521\/modecon.V19(2020)-11 [\/vc_column_text][vc_column_text] Kovalenko\u00a0Victoria, Doctor of Economics, Professor, Professor, Department of Banking, Odessa National University of Economics, Ukraine ORCID ID: 0000-0003-2783-186X e-mail: kovalenko-6868@ukr.net Risks of Project Financing in the Current Conditions of National Economy Development   Abstract. Introduction. Transformation of economic relations determines the need for
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