Title: PPP Risk Allocation Tool (2019)

Language: English

Type: Website

Nature: Toolkit

Published: February 17, 2021

Region: Global

Country: Global / Non-Specific

Topic: Financing and Risk Mitigation

Keywords: Risk allocation

Document Link(s):

Document Summary:

The PPP Risk Allocation Tool 2019 Edition contains matrices showing the allocation of risks as between the public and private partners in typical PPP transactions for 18 different types of projects, including both economic infrastructure (such as transport, energy, telecommunications and water projects) and social infrastructure (such as school and hospital projects). For each sector, there is also an identification of key risk areas and a discussion of risk allocation trends.

Document Details:

The PPP Risk Allocation Tool 2019 Edition is the second edition of the guidance tool, with the first edition focused only on economic infrastructure in the transport, energy, water and waste sectors. The 2016 version of the guidance tool was delivered in 2016 by global law firm Norton Rose Fulbright with the GI Hub team led by Mark Moseley.

The updated PPP Risk Allocation Tool 2019 Edition was delivered by Allen & Overy and builds on the earlier 2016 work with the GI Hub team led by Jack Handford and close continued involvement from Mark Moseley, Morag Baird and Maud De Vautibault. In addition to economic infrastructure projects, the 2019 version of the guidance tool contains risk allocation matrices for social infrastructure projects (such as hospitals and schools), submarine cables and industrial parks.

The PPP Risk Allocation Tool 2019 Edition is based on the collective global experience of over 20 senior lawyers from Allen & Overy. These lawyers have extensive experience advising project grantors and regulators, sponsors, proponents, funders and contractors in both established and emerging markets in civil law and common law jurisdictions as well as those with Islamic legal systems and on a wide range of projects.

Two workshops were held, in Istanbul in November 2018 and in Singapore in April 2019, to garner feedback on earlier drafts of the PPP Risk Allocation Tool 2019 Edition. Additional feedback was sought more broadly from those working in the industry or representing various interest groups through online public consultation. Norton Rose Fulbright continued to play a role in contributing to the evolution of the PPP Risk Allocation Tool and additional key contributions were received from the World Bank, the European PPP Expertise Centre and the Asian Development Bank.

The diversity of experiences across markets means that particular risk allocation arrangements are not necessarily suitable for every market. Each of the matrices that will be found in the PPP Risk Allocation Tool 2019 Edition reflects positions reached in projects that have been shown to be bankable (i.e. they have reached financial close) but, as indicated, each matrix will contain annotations discussing alternative arrangements for different circumstances.

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Updated: September 14, 2022