LL4C9      Half Unit
Project Finance and Public Private Partnerships

This information is for the 2013/14 session.

Teacher responsible

Visiting Professor Roger McCormick.


This course is available on the Master of Laws and Master of Laws (extended part-time study). This course is available with permission as an outside option to students on other programmes where regulations permit.

Course content

Legal issues relevant to the financing of major projects on a limited recourse basis, including the following: Definitions of project finance and PPP; brief history; sectors for which this kind of financing is relevant; risk transfer and other political justifications; the international dimension; the principal parties and their roles; the triangular nature of negotiations; significance of cash flow financing and "bankability"; principal risks and risk allocation methods; Analysis of a concession; the BOT concept; permits and licences; ownership of natural resources and project assets; termination rights and financial effects of early termination; benchmarking and refinancing; force majeure; the differing risk perspectives of government, sponsors and lenders; typical entities taking sponsor roles and summary of contractual structures inter se and with project company SPV; conflicts of interest; how profit is extracted; subordinated debt; subordination generally and other examples of "sponsor support" for project finance; share retention and exit strategies; Commercial banks, IFIs and ECAs and the products offered by them; examples of bankable and unbankable risk; risks posed by transition economy structures; outline of loan document content and structure; local lenders and international lenders; inter-creditor arrangements. Meaning of completion risk and political risk; methods of providing completion guarantees; sponsor debt service undertakings; political risk carve-outs from completion guarantees; issues arising in turn-key construction contracts; Significance of cash-flow based lending; contractual analysis of revenue sources; supply/feedstock and operation contracts; contractual provisions of general concern to lenders; pass-through and back to back provisions; take or pay; "hell and high water provisions"; credit issues; regulatory and permitting issues; government as offtaker; availability and usage fees risk of termination and financial consequences; Relevant issues affecting security interests; Requirements of different kinds of lenders; representations/warranties, financial and other covenants and events of default; Typical conditions precedent, covenants and events of default relating to environment; requirements of different agencies and lenders; relationship of contractual provisions with local law; scope and impact of Equator principles; typical NGO/sustainability concerns; Ongoing debate about UK’s PFI programme; Mock negotiation; Analysis of various sample clauses from documentation will feature in most seminars.


20 hours of seminars in the MT. 2 hours of seminars in the LT.

Formative coursework

A mock examination: feedback session in Lent Term

Indicative reading

The reading list is provisional and may change before the start and topical materials may be added during the course. Books Vinter, Project Finance (3rd Edn) (Thomson/Sweet & Maxwell 2006) International Project Finance (ed. Dewar) OUP 2011 UNCITRAL Legislative Guide on Privately Financed Infrastructure Projects (United Nations 2001) "Attracting Investors to African Public Private Partnerships" World Bank, ICA, PPIAF Articles McCormick "Project Finance: legal aspects" (parts I and II) 1992 8 JIBFL 373- 379 and 1992 9 JIBFL 428 -434 McCormick "Project Finance in Central and Eastern Europe" 1998 1 JIBFL 6-13 McCormick "Risk allocation - towards a standardised approach?" Infrastructure Journal, Winter 1999, edition 4 52-62. Watchman et al, "EP2: the revised Equator Principles: why hard-nosed bankers are embracing soft law principles" LFMR Vol 1 No.2 85 Other HM Treasury website for PFI/PPP and, in particular, section on standardised wording ECGD website, in particular (under "Products and Services") the "Detailed Guide" on "Project Financing" EBRD Model law on secured transactions (published by EBRD and available on its website) "EBRD "Law in Transition Report" Spring 2001 "Focus on Concessions" (p19-60 incl.) Cases A list of relevant cases can be provided if needed.


Exam (100%, duration: 2 hours) in the main exam period.

Key facts

Department: Law

Total students 2012/13: 28

Average class size 2012/13: 30

Value: Half Unit

Guidelines for interpreting course guide information

Personal development skills

  • Communication
  • Specialist skills