A method and system which deal with the evaluation of the impact of political risk on forecast and value of a project. Key macro political risks are identified and quantified. Project specific political risk events that can result from changes in macro political uncertainties are identified and the probabilities quantified. The relationship of the macro political risks and project specific political risk events are defined. The key project economic parameters susceptible to political uncertainties are identified and the threshold or changes in economic parameters upon the occurrence of a risk event are quantified. The data is assembled into a computer system and a Monte Carlo analysis can be preformed to forecast the probable value of the project taking into account potential political risks.
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