Even where a government is financially strong, a government’s willingness to give a guarantee will depend on the degree to which it is committed to the project as well as on its perception of what the market will bear. For example, a 100% credit risk cover may reduce the effort a lender puts into investigating the status and prospects of the borrower. As a result, guarantees can be most successful where they have a catalytic effect for countries or institutions that are at or just below creditworthiness. And even when risk mitigation instruments are in place, project sponsors and lenders must still manage risks actively in order to minimise the likelihood of project failure, not only because it is in their interest to reap the benefits from the project (or the investment, in the case of a utility) but also because mobilising cover via such instruments may be difficult and costly.