Risk#2

•  Changes in market conditions

Potential impact

•  Critical

Description

•  The current estimations on privatization impact are based on informed assumptions. The market conditions at the time of transaction might be very different and, as such, impact the outcomes of privatization.

Type

•  General: the risk can impact transversally all VRPs

Risk mitigation measures

•  Plan the process well in advance and produce detailed studies in order to identify hedging strategies and reduce uncertainty

•  Identify ranges of expected valuations / proceeds based on best case and worst-case scenarios

•  Report timely to NPC and CEDA key market trends and their impact on current initiatives underway

•  Ensure implementation according to international best practice (i.e. bankable transactions) to increase international funds participation (i.e. debt and equity)

Entity responsible for the measures

•  PSCs for planning and studies definition

•  PSCs and ETs for impact sensibility analysis

•  PSCs for market trends reporting

Timeframe to implement these measures

•  Measures to be implemented case-by-case, depending on initiative-specific timeline and context