Harry joined the project finance division of the Asian Development Bank (ABD). His boss asked him to participate the meeting with a client called Energy Power Plant Co. (EPP) who plans to develop a Gas-Fired Power Plant in Brunei. EPP is one of the largest Brunei`s state own enterprises. At the meeting EPP explained the below project proposal and asked ABD to provide a non-recourse loan (project finance) to the special purpose company (SPC), which EPP set up for this project. After the meeting, his boss requested him to prepare documents which covers below items and present that to the bank`s management meeting next week.

Project Proposed by EPP would be: Initial Investment required: $700m; Power generation: 800MW; Financing: Equity investment from EPP is $70m and the rest ($630m) is planned to be financed by banks; Loan period: 13 years; Interest rate: 7.5%; Power Purchase Agreement: Contract with Brunei Utility Company will be concluded; Fuel: Plan to import Liquid Natural Gas from Malaysia; Construction period, 1 year.

Please prepare the document which covers following items. (a) Lists up 5 possible risks around project to consider (b) How those risks can be mitigated (c) Bankability of the project (d) Recommendation whether the bank should provide non- recourse loan or not together with reason. You can include possible counter proposal to EPP.