The aim of this article is to develop a risk management system to be used for large-scale development projects in developing countries. Such a system can help project managers of this type of projects to gear their projects to different risk environments. Due to high level of risk associated with large-scale development projects, the traditional risk management approach, which assumes that risk can be predicted and budgeted early on, is not adequate for application in the context of these projects. Each large-scale project has a high level of uniqueness that renders benchmarks from databases generated out of previous projects obsolete. Therefore, a reactive risk management approach is being promoted. The formulated system defines the key milestones, at which risk needs to be assessed and proper reactions identified. This system is investigated in the context of developing countries where investments in general are characterized by a high level of risk.