Legislative and Government policy risk is the risk that Government will exercise its powers and immunities, including but not limited to the power to legislate and determine policy, in a way which negatively impacts or disadvantages the project.
Government will accept some aspects of this risk by:
• warranting its ability to contract; and
• agreeing to accept the risk of certain changes in law (see further Chapter 24 (Change in Law) of the Risk Allocation and Commercial Principles for PFPs).