The instinct to price frontier risk through headline return targets is widespread and, in our view, insufficient. A required return that assumes recovery in a distressed scenario is only meaningful if the structure permits recovery at all.
We focus on three structural questions before commercial terms are agreed: where the cash is captured, whose consent is required to move it, and what happens to the security package under a change of administration.
Alignment matters as much as documentation. Transactions in which the operator, host government and financiers each hold a genuine stake in continuity have consistently proved more resilient than those held together by covenant alone.
Governance is the third pillar. Institutional reporting, independent verification and board-level participation are not administrative overhead; they are the mechanism through which problems surface early enough to be solved.