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      Question

      In project finance, 'Completion Guarantee' is a

      undertaking provided by the project sponsors to the lenders to cover:
      A Market risk after the project is operational. Correct Answer Incorrect Answer
      B Operational inefficiencies. Correct Answer Incorrect Answer
      C Cost overruns and delays during the construction phase. Correct Answer Incorrect Answer
      D Foreign exchange risk. Correct Answer Incorrect Answer

      Solution

      A Completion Guarantee is a key feature in project finance. It is a promise by the project sponsors to the lenders that they will ensure the project is completed on time and within budget. This guarantee covers the construction risk, protecting lenders if the contractor fails.

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