Skip to content

Latest commit

 

History

History
45 lines (30 loc) · 1.44 KB

ProjectFinanceScorecard.md

File metadata and controls

45 lines (30 loc) · 1.44 KB
Raw

Standardized Specialized Lending Scorecard for Project Finance

Risk Factor Hierarchy

The Project Finance Scorecard is a hierarchical scorecard.

Top Level Risk Factor Groups

Characteristics are grouped in a hierarchical tree structure with five top level Risk Factor Groups:

  • Financial Strength
  • Political and Legal Environment
  • Transaction Characteristics
  • Strength of Sponsor
  • Security Package

Lower Level Decomposition of Risk Factor Groups

Risk Factor Groups resolve in a number of Risk Factors

For example the Financial Strength Risk Factor Group assesses the following:

  • Market Conditions
  • Financial Ratios
  • Stress Analysis
  • Financial Structure

Score Calculation

Partial Scores

Each Risk Factor or Risk Sub-Factor Characteristic (as appropriate) is mapped into one of four possible Attributes as per the below schedule

  • Category 1: Strong
  • Category 2: Good
  • Category 3: Satisfactory
  • Category 4: Weak

The numerical Partial Score of each attribute is the Category cardinality (i.e., 1, 2, 3, 4)

Characteristic Weights

Characteristics at all levels of the hierarchy are assigned weights of relative importance. These weight assignments constitute a model component that must be specified and justified (documented) separately.

Relative weights must be between 5% and 60%.

Overall Score

The overall score is the weighted sum of partial scores. The overall score is rounded to the nearest cardinal number