Research on Financing Risk and Its Control in BOT Projects

The purpose of this paper is to analyze the capital structure and present a simplified model to determine an optimum equity level in term of the financing scale, time limit and returns of investment for decision-makers at the evaluation stage of a BOT project, which takes place immediately after the completion of a feasibility study. The resulting model not only can help the sponsor to avoid the capital risk but offer the government a criterion to evaluate the management ability of the sponsor as well. To show the application and availability of this model, a case study is conducted.