Government support and risk-return trade-off in China's BOT power projects

Government support plays an important part in risk-return trade-off of participants in privately financed infrastructure projects. Depending on the level of government support, risk-return trade-off of the private sponsor varies from project to project. Case studies on two of China's build-operate-transfer (BOT) power projects that were developed at different time periods illustrate that government support has a significant effect on both risk and return of the private sponsor. It is hoped that such understanding would help the private sponsor strike a desirable risk-return trade-off in structuring a BOT deal.