Key documents in a PFI/PF2 project
Key documents in a PFI/PF2 project

The following Construction guidance note provides comprehensive and up to date legal information covering:

  • Key documents in a PFI/PF2 project
  • Project documents
  • Equity and Subordinated Debt Documents
  • Finance documents

This Practice Note sets out an introduction to some of the most common agreements and documents within a PFI/PF2 project. The particular documents used will depend upon the project in question.

In the 2018 Budget (delivered on 29 October 2018), it was announced that the government will no longer use PF2 on new projects (see News Analysis: Budget 2018—what does it mean for infrastructure and housebuilding?). However, existing PFI and PF2 projects will continue to run, and given the typical lifespan of such projects this is likely to be for many years.

Project documents

Project Agreement

This is the principal agreement in any PFI project. It sets out all of the terms and conditions which govern the relationship between the Authority and Project Co/SPV for the duration of the project. The Project Agreement may be referred to as a concession agreement where the Project Co/SPV is being granted a concession (ie the exclusive right to supply/operate/exploit something to generate third party income). The Project Agreement is usually a lengthy document and for that reason is commonly split down into sections.

The Project Agreement under the PFI regime is heavily standardised with guidance on the approach to PFI projects, as well as drafting provisions, first issued by central government in the late 1990s. HM Treasury’s principal standardisation document the Standardisation of PFI Contracts