INVESTMENT PROJECT REALIZATION RISKS AND WAYS OF THEIR REDUCTION (ABSTRACT)

Dali Magrakvelidze

The problem of risks in investment business, especially such aspects as combination of risk amount and financing availability, risk and profitability is very acute.

Agreement between investment project initiators (participants) and investor (or creditor) on the financing of project depends much on how clearly risks will be determined, analyzed, considered in documents and, in case of need, reduced. The conditions of allocating funds also depend on how well investors and bankers understand the really existing risks during the project realization.
As investments are one of principal economic factors, it is important to reduce the risks of investment project realization, which will serve to attract investments to priority branches of economy.
Creation of perfect investment market is one of the means for reducing investment project realization risks. This will simplify the process of purchase and sale of investment projects.
At the same time, insurance should be viewed as a main mechanism in the reduction of investment project risks. Yet, insurance companies do not attach much attention to this issue, which hampers investment activity.
It is obvious that risks of investment projects can be reduced by studying the mentioned issues and applying them in practice. .