It is an internationally recognized reality that continued and increased investment in the power sector by private firms is essential to providing affordable and reliable energy to an increasing portion of the world population. However, investing in power projects in the developing regions of the world exposes nations, governments, consumers, and investors to unusually high levels of risk. This study will have succeeded if it encourages parties, on all sides, to recognize problems as early as possible and concentrate on identifying possible solutions, and then implementing them. This study marks the interest of investors and lenders in finding procedures and instruments to facilitate the resolution of disputes arising from stress situations. To begin with we will summarize the predominant causes, characteristics, and consequences of project stress in the energy sector of emerging markets. The author will seek to describe and understand the incidence of various patterns of characteristics and consequences of project stress that emerge as power projects are broken down by type industry stage and region. Then the author will discuss how to prevent the emergence of stress situations in power projects as well as the instruments and strategies available for the resolution of power project stress.