Abstract:
The earth and its habitant are facing the consequences of climate change – manifested
by capricious and frequently occurrence of extreme weather events i.e., wildfires,
heatwaves floods, and droughts across the world. Although it has been established that
climate risks have a negative impact on the execution and operations of the projects.
But there is still a need to specifically investigate the effects of inevitable climate
uncertainties on profitability of Private Participation Infrastructure (PPI) projects.
Therefore, in this study, the impact of climate related uncertainties on the profitability
of PPI projects, has been investigated. The moderating effects of the ownership of the
host government has also been studied. In order to conduct the study, the PPI data set
for the period of 2007 to 2019 published by World Bank has been utilized while
techniques of Logistic & Ordinary Least Square (OLS) regression analyses have been
used to carry out the study. The data pertaining to Global Climate Risk Index (CRI)
prepared and issued by German watch has been utilized. Moreover, an analysis to
investigate the impact of climate risks on FDI inflows has also been conducted for the
region of South Asia particularly as the developing countries of this region are amongst
the most affected countries due to climate risks or extreme weather events and FDI can
play a crucial and vital role for economic growth of the developing countries of the
region. It is evident from the results that profitability of the project is affected negatively
due to climate risks. The climate risk has also adverse impact on FDI inflows. The
ownership of the host government has not shown any moderating impact on the
dependent variables in this study.
