All other things being equal, which of the following is most likely to minimise sponsors' risk in participating in a project? Please select the correct answer and give your reasonings.

1. A project whose only completion test is physical completion of all operating facilities
2. A project in which the majority of debt finance is raised by way of public debt (bond) issues
3. A project in which the majority of equity is to be contributed in-kind (e.g. providing equipment and / or services) rather than cash
4. A project in which no parent company guarantees are required in relation to loan repayments
5. A project in which the majority of equity is sold by way of IPO