The Impact of B2B Dynamic Pricing Models on Project Finance

Abstract

The potential role of e-commerce in project finance is just beginning to develop. Online auctions have the potential to lower the financial risk profile of some difficult-to-finance projects by creating efficient forward markets for those projects' end products where none previously existed. By efficiently accessing many market participants, online auctions can aggregate smaller off-take or supply commitments from numerous market participants to create a diversified portfolio of forward contracts, thereby increasing the certainty of the project's revenues. This online auction approach also has many other benefits over the existing, conventional approach, which are explained in the article.