The Covid-19 crisis has had a major impact on economic activity around the globe. Unlike the 2008-9 financial crisis, which originated in excessive bank lending, countries are dealing with a global health pandemic that has caused a crisis in the economy and is expected to spread to banks and the financial markets. Economies in the regions covered by the European Bank for Reconstruction and Development (EBRD)2 have experienced numerous political and economic crises before, but there is widespread agreement that the scale of the Covid-19 crisis and its global effects are unique.

EPEC guidance - Termination and Force Majeure Provisions in PPP Contracts - Europe - summary of termination and force majeure provisions used in PPP projects in Europe (2013)

EXAMPLE 1 - simple example

This is a simple example, with no distinction between political and natural events. It requires that payment obligations continue even in the case of Force Majeure. It relates to a BOT project and so there is a Construction

See also, Sample force majeure Clauses

What is force majeure?

Certain events, beyond the control of the parties, may inhibit the parties from fulfilling their duties and obligations under the project agreements. To avoid the resultant breach of contract, parties may prefer to excuse contractual obligations to the extent that they have been so inhibited.

The following text is adapted from the GPOBA brochure “Output-Based Aid at Work in Public-Private-Partnerships”, found here: https://www.gpoba.org/sites/gpoba/files/OBA51_PPP.pdf

THIS DOCUMENT HAS BEEN PREPARED FOR THE PURPOSES OF THE PPP IN INFRASTRUCTURE RESOURCE CENTER FOR CONTRACTS, LAWS AND REGULATIONS (PPPLRC). IT IS A CHECKLIST FOR GENERAL GUIDANCE PURPOSES ONLY AND SHOULD NOT BE USED AS A SUBSTITUTE FOR SPECIFIC LEGAL ADVICE FOR A PROJECT.

World Bank Group, Water and Sanitation Program (WSP), July 2014.