A change in law or a sanction can also have an impact on the Project Company as the Project Company is required to adhere to the relevant rules and regulations of the jurisdiction in which it operates. Which party is required to pay any additional costs related to a change in law will depend on the risk allocation agreed in the PPP contract. The PPP contract will typically set out the circumstances in which a party can seek relief as a result of specific changes in law, and which changes in law will not carry with them any entitlement to relief. There may also be potential for the Project Company to benefit from a change in law, meaning that any compensation payments for change in law can flow in either direction. The 2017 version of the World Bank's Guidance on PPP Contractual Provisions2 provides detailed commentary on different types of change in law regimes.
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2 Available at http://ppp.worldbank.org/public-private-partnership/library/guidance-on-ppp-contractual-provisions-2017-edition.