Project-financed Infrastructure: a Systematic Approach to Evaluating Project Complexity From a Lenders’ Perspective

The planning, implementation and operation of large infrastructure projects brings together a range of stakeholders with variously aligned interests and risk perceptions. In project-financed infrastructure, lenders are a specific stakeholder whose risk analyses need to understand a project’s technical substance as a basis for appraising the quality of borrower’s plans and making their decisions on financing conditions. This need makes an interesting interface of disciplines, where engineering and finance worlds must meet and work together in the specific domain of lenders’ technical due diligence. In this context, the lenders’ perspective of project complexity was explored, and a lack of mutual understanding was identified between engineers and finance experts as regards project complexity. To address this, the thesis conceptualised a systematic approach to project complexity evaluation to explore whether and how project complexity evaluation could improve cross-disciplinary collaboration and communication in the realm of technical due diligence performed by engineers supporting lenders’ risk analyses. Through case studies and interviews, the study confirmed that an absence of a systematic project complexity evaluation can give rise to conflicting perceptions about a project’s technical riskiness. It was shown that a systematic approach to complexity evaluation can act as a needed nexus between engineering and finance expertise. If applied at a preliminary phase of technical due diligence, systematic complexity evaluation can facilitate communication and collaboration, complementing the existing risk analysis practices and methods by establishing a common understanding of a project’s substance. Through critically considering different experts’ views enabled by a BWM-based analysis applied in this study, an enriched understanding of project complexity can be gained, helping streamline the identification, evaluation and management of risks and eventually contributing to more informed decisions.Civil Engineering | Construction Management and Engineerin