Introduction

Just to reinforce Professor Thomas Waeldes' point about the role of stabilization clauses in reducing costs in privately financed infrastructure projects, it is worth noting the role of debt finance - which is generally the majority of the capital raised to build and operate a project (prior to the Asian financial crisis, project costs in LDC power projects were commonly financed 75-80% by debt). In evaluating the finance-ability (bankability, for those of you across the Atlantic) of a particular project, lenders consider both the prospects for sufficient revenue to ...