Project financing is sometimes used by large energy companies as a means to mitigate project political risks. Such protection does not come without a cost. Project financing typically costs a premium of 2% or more versus the firm’s normal borrowing cost. In risky locations, the premium can soar to 4% or more. Energy firms then struggle to determine whether the protection they obtain is worth the cost premium. This involves a comparison of “intangible” risk mitigation benefits and easily calculable, “hard” dollar costs. This case provides an opportunity for students to consider such tradeoffs. Students should calculate the hard costs, and then devise their best method for valuing the “intangible” protection gained by using project finance. The case for project financing is rendered more difficult by financial markets not being in a receptive mood for a Soro Dondar deal.