The SoPC4 form of contract now gives the authority a right to request a senior debt refinancing once every 2 years in circumstances where it believes that the funding terms available in the market are more favourable than those to which the Project Company is held at the time.
On NPD projects this right has always existed, exercisable by the Public Interest Director. Under SFT's suite of standard documents, using powers given to him in the Project Company's articles of association, the Public Interest Director can direct the Project Company to pursue a senior debt refinancing. The authority's consent is, however, still required under the NPD project agreement in order for the Project Company to proceed if the refinancing constitutes a Qualifying Refinancing.
The relevant drafting is set out in the standard form articles of association that sit alongside the standard NPD project agreement.
The refinancing provisions in the standard NPD project agreement and articles of association assume a subordinated debt structure. The refinancing provisions for projects involving other tranches of debt (e.g. mezzanine debt) will need to be considered on a case-by-case basis (and discussed with SFT) and will depend on whether the debt is appropriately viewed as quasi-equity or senior debt.