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Setting the pace
01 October 2001
Daniel E. White, Executive Vice President and Rutherford S. Poats, Vice President, Financial Services, Pace Global Energy Services,
LLC outline solutions to problems in some of the world's most attractive
but difficult power markets ? Brazil, China and Indonesia.
Attracting foreign investment and, more specifically, project
financing to global power markets requires addressing a common mix
of issues concerning project cost and revenue risks. Solutions can
vary, however, to accommodate resource and institutional
differences among markets. Herein we use three markets ? Brazil,
China, and Indonesia ? as examples that offer attractive
supply/demand fundamentals but remain challenging for foreign
investment and project finance.
Currently, Brazil faces significant impediments to attracting
project finance in urgently needed thermal capacity, while China
and Indonesia being relatively dormant despite strong underlying
fundamentals, as each country is in process of changing its
structural approach to securing power generation investment. The
unique resource and institutional features of fundamentally strong
but economically challenging investment environments beg for
finding structural and market solutions. We review current
impediments to securing investment and suggest several
institutional and structural modifications to overcome financing
While regulatory, market, contract, and...
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