Risk Analysis & Financial Evaluation in Power Plant BOT

The aim of this thesis is identifying and modeling the risks of the power plant BOT projects. Main identified risks in this study are project financing risk(equity ratio risk) and the risk of revenue of project. In order to model the risks, we used the Martingale Variance Model (MVM) for the revenue risk and the Triangular distribution function for the equity ratio risk. We applicated the Monte Carlo simulations method for obtaining the probability distribution function and critical values of the decision index (Net Present Value, Internal Rate of Return, Debt Service Coverage Ratio). The one of thermal power plant projects data prepared by MAPNA, has been implemented in this study. The results of the simulation indicate that the risk of negative NPV of project is 13.41 percent and the risk of DSCR lower than 1.2 is 8.65 percent. Therefore, the sponsors suffering more risks than lenders in the studied project.