The project, in order to align incentives, will include a regime of sanctions or penalties for failure by project parties to comply with their contractual obligations, for example on the project company for sub-standard service delivery and on the construction contractor for late completion.
Jurisdictions treat penalties or liquidated damages differently. Some jurisdictions allow them so long as they are reasonable, others require them to be a genuine pre-estimates of the damage likely to be suffered, for example in England. Still others allow the court to modify such penalties in order to achieve reasonableness, in particular where one of the counterparties is a public entity, for example in France. There may be limitations on charging interest on interest or on imposing a rate of interest on judgments that is different than that prescribed by the court.