Research On Project Financing Risk Of Modern Coal Chemical Industry

With the rapid development of China’s economy,modern coal chemical industry is increasingly favored by many enterprises and investors.Project financing with its particular characteristics and advantages has been applied in the modern coal chemical project construction.In order to guarantee the timely success of project financing,the security of the lenders funds and the realization of the stake holders expectations,The various risks in the process of project financing need to be effectively identified,evaluated and appropriately managed and controlled.Reviewing the large amount of research data on engineering project financing at home and abroad,it was noted the majority of the literature covers large scale infrastructure and resource development projects,and the modern coal chemical projects have few project financing cases due to their inception.In the data investigation and practical work,risk analysis is mostly qualitative,dominated by subjective factors.Some cases of quantitative analysis also tend to be calculated by theoretical analysis and evaluation methods,and cannot be meaningfully integrated to the actual projects.In addition,previous researchers have only focused on finance or engineering project management.In order to compensate for the lack of one-sidedness and unity in the financing risk analysis of modern coal chemical projects,combined with my previous engineering practice experience,this article is the basis of theoretical research on project financing.The various types of risks in project financing were carefully and comprehensively identified and classified effectively,scientific estimates and proactive risk prevention formulations were studied,and actual projects were used as examples to conduct a combination analysis of a qualitative and quantitative method with highly credible expert survey and capital asset pricing model(CAPM model).In order to verify the applicability of the theoretical application and the rationality of the financial analysis in the project feasibility report,this paper uses the capital asset pricing model(CAPM model)combined with the weighted average cost of capital(WACC)method to calculate the industry’s benchmark rate of return(the adjusted results of taking into account the industry risk correction factor and the influence of non-system factors).Combined with the financial cash flow model,comprehensive analysis was performed,and the results consistent with the technical and economic analysis of the project were obtained.Examples support the theory,and the theory correctly guides practice.Techno-economic analysis is the basis of project financing risk analysis.Project financing risk analysis is a modification of techno-economic analysis in the presence of market,economic,and financial environmental risk factors,and it is also a verification of the assumptions applied to the CAPM model.The risk analysis of project financing in consideration of external risk factors and the technical and economic analysis based on the internal factors of the project itself are complementary and consistent with each other and verified by each other.It is also the project sponsor and investor to ensure the success of the project.Through the project financing risk analysis,techno-economic analysis,project uncertainty analysis of the example project,it is a quantitative assessment of the project’s feasibility or risk based on the qualitative analysis of the current market economic environment,it is objective,reasonable,practical and instructive.The research results verified that the quantitative assessment of the CAPM model is applicable to the project financing risk analysis of modern coal chemical industry.It combines the theoretical knowledge of finance with the fields of engineering technology,technology and economics to guide,verify,and integrate with each other,which complements the combined gaps between the fields of engineering,technology and economics and finance.The analysis provides a case study for the subsequent modern coal chemical project financing.In the last part of this article,a scientific,and realistic analysis of the risk factors in the project financing of modern coal chemical projects is made,and according to China’s current economic form and the status of the financial industry,the author has put forward own opinions and suggestions.It is also hoped that this study provides some references for the support of the modern coal chemical industry in China’s financial sector,and assist in the further development of the modern coal chemical industry in China.