Inflation Risk Management in Project Finance Investments

Project finance investments are a key backbone for a wide range of sustainable and bankable new infrastructures; being long term investments, they are highly exposed to inflation risk, which in Public Private Partnerships is mostly borne by the private counterpart and its backing lenders. Prompt monitoring and resilient contractual design ease inflation risk detection, management and mitigation, together with proper and flexible financial modelling, alleviating its potentially disrupting impact, especially if unpredictable or chronically enduring.