The Procuring Authority will need to do a full assessment of the implications of a given refinancing proposal. This will include ensuring it has the necessary expertise to assess the risks of the refinancing and any potential benefits. This applies to a refinancing requested by the Project Company, as well as the potential for the Procuring Authority to request a refinancing itself.
External advisors will often be needed by the Procuring Authority to assess a refinancing, as it may not have the skills available in-house. The use of external advisors is detailed in Section 2.1 (Contract management team set-up). This will also depend on the Procuring Authority. For example, a large government department may have the expertise available from another part of the organisation or there may be a team available that sits across several projects which has experience with refinancing.
The research indicates that public sector authorities often lack refinancing expertise in-house, and external financial advisors specialised in refinancing are typically required. Issues have arisen due to the time the Procuring Authority has taken to approve refinancing initiated by the Project Company. Where the Project Company is looking to benefit from favourable market conditions, any delays in approvals from the Procuring Authority may lead to the refinancing opportunity being lost.