Risk Framework
Our comprehensive approach to identifying, assessing, and mitigating investment risks
Important Investment Disclosure
All investments carry risk, including the potential loss of principal. Infrastructure investments are long-term, illiquid, and subject to market, regulatory, and operational risks. Past performance does not guarantee future results. This framework is for informational purposes and does not constitute investment advice.
analyticsRisk Assessment Methodology
Ethelred Capital employs a multi-dimensional risk assessment framework that evaluates projects across six critical dimensions. Each project receives a comprehensive risk score from A+ (lowest risk) to D (highest risk).
Risk Categories
1. Technical & Execution Risk
Assessment of technological maturity, construction complexity, and execution capability.
- Technology readiness level (TRL)
- Contractor track record and experience
- Supply chain reliability and verified suppliers
- Construction timeline feasibility
- Technical complexity and innovation risk
2. Regulatory & Permit Risk
Evaluation of regulatory compliance, permit status, and legal framework stability.
- Permit completeness and validity
- Regulatory environment stability
- Environmental compliance status
- Local opposition and social license
- Policy change risk assessment
3. Financial & Market Risk
Analysis of financial structure, revenue model, and market dynamics.
- Revenue model robustness (offtake agreements, PPAs)
- Demand forecasting accuracy
- Commodity price exposure
- Interest rate and FX risk
- Capital structure and leverage
4. Operational Risk
Evaluation of operational complexity and long-term management capability.
- O&M plan comprehensiveness
- Management team experience
- Asset lifecycle planning
- Performance monitoring systems
- Maintenance cost predictability
5. ESG & Sustainability Risk
Assessment of environmental, social, and governance factors.
- Carbon footprint and emissions profile
- Community impact and stakeholder engagement
- Labor practices and safety standards
- Governance structure and transparency
- Climate resilience and adaptation measures
6. Liquidity & Exit Risk
Evaluation of investment liquidity and exit strategy viability.
- Secondary market availability
- Exit strategy clarity and feasibility
- Investor lock-up periods
- Asset marketability post-construction
- Refinancing opportunities
Risk Mitigation Strategies
Pre-Investment De-Risking
All projects undergo extensive validation before listing, including permit verification, supplier confirmation, and technical feasibility studies.
Portfolio Diversification
Investors are encouraged to diversify across sectors, geographies, and time horizons to reduce concentration risk.
Active Monitoring
Continuous project monitoring with quarterly reporting, milestone tracking, and early warning systems for potential issues.
Insurance & Guarantees
Projects include appropriate insurance coverage, performance guarantees, and contractual protections.
Our Due Diligence Process
Initial project screening and eligibility assessment
Technical feasibility review by independent engineers
Legal and regulatory compliance verification
Financial model validation and stress testing
Market analysis and demand forecasting
Environmental and social impact assessment
Management team background checks
Third-party risk rating and credit analysis
Final investment committee approval
Risk Score Guide
Questions About Risk?
Our investment team is here to help you understand the risk profile of each opportunity.
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