The Influence of Financial Risk Mitigation Strategies on the Performance of the Grand Ethiopian Renaissance Dam (GERD) Project

Large infrastructure projects in developing nations face multifaceted risks that significantly influence their performance outcomes. The Grand Ethiopian Renaissance Dam (GERD), as Africa's largest hydropower project, presents a critical case for examining the relationship between financial risk mitigation strategies and project performance in complex, large-scale infrastructure development. Despite extensive literature on the political, legal, and hydrological dimensions of the GERD, there is a notable scarcity of empirical research evaluating its internal financial risk architecture. This study investigated the influence of financial risk mitigation strategies on the performance of the GERD project. The study employed an explanatory sequential mixed-methods research design. The target population comprised 320 project managers, engineers, and senior officials directly involved in the GERD project, from which a sample of 178 respondents was selected using stratified random sampling and purposive sampling techniques. Data collection utilized structured questionnaires (with 167 valid responses, representing an 85.2% valid response rate from the 196 distributed) and key informant interviews with 15 senior officials, complemented by document review. Quantitative data were analyzed using descriptive statistics and inferential statistics (Pearson's correlation and multiple regression analysis) through SPSS version 26. Qualitative data underwent thematic analysis following Braun and Clarke's (2021) six-phase framework. The study was grounded on Contingency Theory, complemented by Resource Dependence Theory. Findings revealed a significant positive relationship between financial risk mitigation strategies and project performance (r = 0.624, p < 0.01), with the regression model explaining 38.9% of the variance in project performance (R² = 0.389, F(1, 165) = 105.23, p < 0.001). Currency risk management emerged as the weakest area (M = 3.45), highlighting challenges in accessing international hedging instruments. The study concludes that financial risk mitigation strategies have a significant positive influence on the performance of large infrastructure projects. It is recommended that development finance institutions and governments should consider establishing regional currency stabilization mechanisms or partnerships with multilateral development banks to provide access to hedging instruments for infrastructure projects in developing nations. Keywords: Financial Risk Mitigation Strategies; Project Performance; Grand Ethiopian Renaissance Dam; Megaproject Finance; Currency Risk Management