Investors and the other parties involved in a private finance project
1.5 A typical PFI project is made up of a complex set of contracts and relationships (Figure 2). Investors play an important role in bringing the various parties together and supporting service delivery. They:
• develop the project by:
• taking the lead in developing the project including negotiating terms with, and appointing contractors;
• providing risk capital and raising project debt finance; and
• leading the private sector negotiations with the public authority.
• Oversee the management of the project once a contract has been let.
| Figure 2 A typical project company financing structure |
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| NOTES 1 Banks, or bondholders, provide the senior debt on a project finance basis. 2 Broken arrows represent the likelihood that the contractors will also be investors. Source: National Audit Office |
