Risk is a given in any investment. It is incorporated into valuation in the cost of equity and debt which flows into the discount rate. International projects are considered higher risk given the potential for political and/or currency fluctuations. Therefore a country risk premium is added to the discount rate for international projects. This page looks at three methods to estimate country risk premiums.
The bond premiums approach finds dollar-denominated bonds issued by the country and compares those bond yields by the US treasury yields. The difference can be attributed to the country risk premium.
The variance approach requires you to find the variance of the market returns in the foreign country and compare it to the variance in the US market. The ratio of the foreign country variance / US variance gives you the multiple on the US risk premium you will use.
The rating by experts approach studies various factors such as political stability, ease of doing business, etc. and rates the country on these factors on a scale index. This index is translated to a risk factor and a risk premium.