Guide to insolvency in PFI/PF2 projects
Produced in partnership with Mathias Cheung of Atkin Chambers

The following Restructuring & Insolvency practice note produced in partnership with Mathias Cheung of Atkin Chambers provides comprehensive and up to date legal information covering:

  • Guide to insolvency in PFI/PF2 projects
  • What are PFI/PF2 projects?
  • Political context of PFI/PF2 insolvency
  • Navigating PFI/PF2 insolvency—steps and provisions
  • (i) Acceleration provisions under the Loan Agreement
  • (ii) Enforcement of security under the security agreements
  • (iii) Termination of Project Co or Contractors
  • (iv) Step-in and novation under Funders Direct Agreements
  • Restructuring options in the face of insolvency
  • Insolvency of Construction/FM Contractor
  • More...

Guide to insolvency in PFI/PF2 projects

This Practice Note is a guide to insolvency in PFI/PF2 projects. The aim of this Practice Note is to provide restructuring and insolvency practitioners with an overview of the relevant contractual provisions, restructuring options and potential measures to protect a client’s position.

What are PFI/PF2 projects?

The Private Finance Initiative (PFI) is a public private partnership (PPP) model, the purpose of which is to procure and deliver a variety of public infrastructure and services, including schools, hospitals, prisons, railway links, roads and social housing.

A PFI project is typically funded by private sector lenders, with private sector contractors taking on the burden and risk of the design, construction and/or day-to-day operations. Each PFI project is usually a long-term arrangement which lasts for 25–30 years.

Private Finance 2 (PF2) was introduced by the government in December 2012, with a view to increasing the sources of equity and debt finance, increasing transparency, and reducing the cost of the procurement process. In particular, the government often acts as a minority equity investor in PF2 projects.

For more background information about PFI/PF2 projects, see the Practice Notes on Introduction to PFI and PF2 and PFI/PPP terms (Glossary).

The parties involved in a PFI/PF2 project depends on the type of infrastructure/service being procured and the funding arrangements in each project. For a more detailed discussion of the parties typically involved

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