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OGC guidance on certain financing issues in PFI contracts

  • Last modified date:
    14 February 2007
The terms on which finance is available in PFI contracts can affect the value for money as much as the underlying cost of finance itself. This OGC guidance covers three aspects of financing in some detail:
  • Section 1:  Ensuring competition in the financing of contracts
    This includes suitability of projects for funding competitions, the risks and costs, how to run a funding competition, the calculation and division of benefits and refinancing competitions.
  • Section 2:  Using the capital markets for finance
    This covers the use of capital markets, an explanation of bond finance, including monoline insurance and an indicative timetable for a project bond issue.
  • Section 3:  The use of internal rates of return in PFI projects
    This describes the categories of IRR, their use in PFI contracts and the methodology for calculating them.

The guidance complements OGC guidance on standardisation of PFI contracts.

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