VALUATION OF LOAN GUARANTEE AND LOAN GUARANTEE WITH DIRECT INVESTMENT IN TOLL ROAD INFRASTRUCTURE PROJECT

• Main Author: Ramdani
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/36173
• Institution: Institut Teknologi Bandung

Whenever government wants private sector to contribute build infrastructure project, they have a particular level of return or risk about the value of projects which are must be fulfilled. The indicator that has the capability to capture that particular level of return or risk about the value of the project is Net Present Value. In order government ensuring private sectors Net Present Value, the government can give a guarantee. In case an infrastructure project is financed with loan, the private sector will have an obligation to repay that loan annually so there is a risk that private sector fail to repay the loan. To handle that risk, the government can give loan guarantee or government can give direct investment to help minimizing levels of loan. In this study, Real option approach is used to evaluate guarantee, before calculating and analyzing guarantee in like option form, project volatility will be estimated by unbiased Generalized Conditional Expectation. Finally, the guarantee will be valuated on risk neutral pricing condition