2.5  Rate of Return

The investor rate of return, bid in competition, should reflect the level of risk transfer negotiated. It is important that the risk transfer is sustainable and so the risks passed to the Project Company should be evaluated against the cash flows in the NPD model to ensure that, in the absence of equity, these risks can be managed effectively. The sustainability of the proposed risk transfer should be evaluated in a sector-specific context and procuring authorities should seek advice in carrying out such an assessment.