Which party initiates refinancing?

The private party is responsible for initiating a refinancing.

It is possible, although uncommon, for the government party to request a refinancing. However, there are risks to the government party in pressing for a refinancing, since the private party might seek to gain a negotiating advantage from the government party's eagerness for a refinancing.

Contract directors should be mindful of the differing incentives of those involved in refinancing. Financial intermediaries, such as investment banks, earn fees for arranging new forms of finance and from underwriting a refinancing for an existing project. They therefore have an incentive to seek and stimulate refinancing opportunities.