Asset ownership risk encompasses:
• the risk that the facility design life or technical life will prove shorter than anticipated and/or that the maintenance and upgrade costs of keeping the facility serviceable will exceed expectation
• the risk that the asset will be damaged or destroyed through a force majeure event
• the risk (depending on the contract detail) that the private party may lose the asset through default and early termination
• the risk that the facility will not have the value which the project financial structure has ascribed to it.
Risks arising from asset ownership can arise both during and upon termination of a service contract.
The ensuing discussion considers asset ownership risk in two categories: during the contract term and at the end of the term.