PFI/PPP finance guidance
Finance guidance specific to PFI/PPP arrangements.
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The government has announced that it will no longer use PF2, the current model of Private Finance Initiative (PFI) for new government projects. Existing PFI and PF2 contracts will not end because of this announcement.
Application note: interest and inflation risk
The application note has been designed to help Authorities understand and evaluate cost effective strategies for managing interest rate and inflation risks in PPP transactions.
The guidance note provides guidance on the calculation and use of internal rates of return (IRR) in PPP contracts.
Preferred bidder debt funding competitions
Following the public sector consultation of preferred bidder debt funding competitions, guidance has been published in draft-outline for wider feedback.
Refinancing
The Code of Conduct sets out the basis on which individual Authorities will approach the refinancing by private sector contractors of early PFI transactions. It is a voluntary Code to enable private sector contractors to share refinancing gain with the public sector on a consistent and equitable basis.
The guidance note is intended to help authorities and their financial advisers in calculating Refinancing Gains.
Spens
The government has previously expressed its concern that the Spens formula, which applies to listed bonds in the UK, creates an extra cost of termination for a PFI project. To address this concern HM Treasury requires all PFI contracts funded through the capital markets to contain a modified Spens clause. This guidance has been issued to assist Authorities in determining the most appropriate form of modified Spens to be applied.
Last updated 7 December 2018 + show all updates
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Updated with the statement: 'The government has announced that it will no longer use PF2, the current model of Private Finance Initiative (PFI) for new government projects. Existing PFI and PF2 contracts will not end because of this announcement'.
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First published.