War and civil disturbance is harder to deal with.
It's possible to get sovereign risk insurance for
some jurisdictions where war and civil disturbance is a legitimate and
possible risk, but that's not always the case.
And sometimes project finances have to accept
that they're going to take some war and civil disturbance risk.
Some of this possibly can be dealt with if it's short term with business interruption
insurance, and other sorts of insurance.
But at the end of the day, that risk generally falls back,
in worst possible case to project financiers, and sponsors would sometimes
recognize opportunity there to exercise their walk-away option.
And finally in this section here is the change of laws.
What is the regulatory environment like?
Is the government likely to support the regulatory environment, or
are they likely to change the regulatory environment?
Is the regulatory environment, if it is a question,
is it non-discriminatory, or is it possible that the government could be
discriminatory in their regulatory environment and
support one project versus one of the other projects?
And what are the remedies in a regulatory environment for breach of contract?
So you may have a contract,
an offtake contract under a certain regulatory environment, but
if the regulatory environment changes, what are the arrangements for
adjusting that contract if there is a change in regulatory environment?
Sometimes that responsibility goes to the offtaker or the supplier.
Sometimes it has to remain with the project.
Sometimes the government provides
compensation if there's a change in regulatory environment.
But it should be understood, if you're relying on a regulatory environment,
what the remedies are there.
