CONSTRUCTION-PERIOD CREDIT RISK MANAGEMENT FOR LARGE INFRASTRUCTURE PROJECT FINANCE IN KAZAKHSTAN

Abstract

Large infrastructure projects create public value after construction has converted financing, permits, designs, equipment and civil works into an operating asset. For a bank, this conversion period concentrates credit risk because operating cash flow is limited, exposure rises with drawdown, and several events can delay completion or increase debt. This study examines the transmission channels and directional implications of construction risk for probability of default, loss given default, exposure at default, expected credit loss and prudential capital in Kazakhstan. It combines document analysis, project finance theory, lifecycle process mapping and a fully synthetic three-scenario case; it does not estimate those risk parameters or capital amounts. The proposed framework covers engineering, procurement and construction performance, cost overrun, delay, foreign-exchange mismatch, permits, offtaker obligations, environmental and social performance, drawdown control, independent review, contingency, debt service reserves, sponsor completion support, direct agreements and covenants. The analysis indicates that contractual allocation, evidence-based disbursement and forward-looking monitoring should operate together. The framework links each material risk to a measurable indicator, decision right, funding source and remedial action, providing a practical basis for banks financing transport, energy, water, municipal and industrial infrastructure in Kazakhstan.

Keywords: project finance, construction risk, credit risk, infrastructure, Kazakhstan, drawdown control, DSCR

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Как цитировать

Chen J. CONSTRUCTION-PERIOD CREDIT RISK MANAGEMENT FOR LARGE INFRASTRUCTURE PROJECT FINANCE IN KAZAKHSTAN // Central Asian Scientific Journal. – 2026. – No. 4(32), Vol. 1. – Pp. 159–172.