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Authors

Rodney Short

Abstract

This Essay questions whether Extra Credit Agencies should provide such long-term commercial risk insurance in project finance transactions. It can be argued that ECA-provided commercial risk insurance in project financings lifts from commercial banks the onus of rigorously analyzing the commercial risks of a project and that ECAs lack the institutional experience and commercial orientation to sufficiently appraise a project's commercial risk. This leads to the very real possibility that projects will be undertaken that on their own (i.e., without commercial risk insurance) might not be commercially viable.

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