PPP Projects with Full Compensation of Investor Costs
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- The Moscow Arbitrazh Court and the Ninth Arbitrazh Appellate Court have considered an important case for the PPP projects market relating to potential compensation by the treasury of all investor costs incurred in the project.
- The Ninth Arbitrazh Appellate Court found that financing of a concession facility by treasury in full is possible, but only through the use of two different instruments (capital grant and concession provider’s payment) which have different legal natures.
- The Appellate Court also determined that the tender for the execution of a PPP agreement may include a requirement for the bidders to have financing experience in connection with similar projects and that a bank guarantee may be provided as a security for the execution of the agreement.