TRW & Co · Banking, Finance & Restructuring
Project and Infrastructure Finance Lawyers in London
Project finance lawyers London sponsors, lenders and public bodies instruct turn energy, transport, digital and social infrastructure projects into bankable investments by allocating construction, revenue and termination risk across a web of contracts. With the 10 Year Infrastructure Strategy, new PPP models and planning reform under way, 2026 is a busy year for UK infrastructure finance.
Key pointA project is bankable only when every major risk sits with a party able to bear it under an enforceable contract; most delays at financial close come from project contracts signed before lenders' counsel reviewed them.
At a glance
Limited recourse lending
Lenders are repaid from the project company's cash flows and assets, so construction, revenue and termination risk must be allocated contract by contract.
Revenue models drive credit
CfDs under the Energy Act 2013, the nuclear RAB model, Ofgem cap and floor and hydrogen and CCUS contracts underpin most UK energy project debt.
New planning legislation
The Planning and Infrastructure Act 2025 received Royal Assent on 18 December 2025 and reforms consenting for nationally significant projects in stages.
Procurement Act in force
Public procurements started on or after 24 February 2025 are governed by the Procurement Act 2023 rather than the previous procurement regulations.
PPP returns cautiously
The Autumn Budget 2025 confirmed a new PPP model for neighbourhood health centres, while the government ruled out a return to PFI or PF2.
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What project finance lawyers London sponsors and lenders rely on actually do
Project finance funds a single asset, such as a wind farm, battery storage site, data centre, road, hospital or power plant, through a special purpose company whose debt is repaid from the project's own cash flows rather than from its owners' balance sheets. The project finance lawyers London sponsors, lenders, contractors and public bodies instruct build the contract structure that makes those cash flows predictable enough to borrow against.
The lenders' recourse is limited to the project company, its assets and its contracts. That makes every risk a legal question: who bears construction delay, cost overrun, revenue shortfall, change in law, force majeure and termination. A project is bankable when those risks sit with parties able to manage them, under documents that lenders can enforce.
The UK pipeline is large. The government's 10 Year Infrastructure Strategy, published in June 2025, committed at least £725 billion of public funding over a decade and signalled a cautious return of public-private partnerships, while clean power, grid, nuclear and digital infrastructure all need private capital.
The legal and regulatory framework
Consenting
Nationally significant infrastructure projects in England, including large generating stations, major transport schemes and certain other categories, need a development consent order under the Planning Act 2008, examined by the Planning Inspectorate and decided by the relevant Secretary of State. Smaller projects use ordinary planning permission. The Planning and Infrastructure Act 2025, which received Royal Assent on 18 December 2025, reforms the consenting process, including changes intended to reduce delay from legal challenges; its provisions are being commenced in stages. See our article on the Planning and Infrastructure Act.
Revenue support models
Most UK energy projects rely on a government-backed revenue model that lenders treat as the core of the credit:
- Contracts for Difference. Created under the Energy Act 2013, CfDs pay low-carbon generators the difference between a strike price and a market reference price, with the Low Carbon Contracts Company as counterparty. Our article on Contracts for Difference explains the allocation rounds.
- Regulated asset base. The Nuclear Energy (Financing) Act 2022 allows nuclear projects to earn a regulated return during construction. Sizewell C reached a final investment decision in 2025 on this model, with the National Wealth Fund providing the majority of its debt.
- Cap and floor. Ofgem's cap and floor regime supports interconnectors and is being applied to long-duration electricity storage.
- Hydrogen and carbon capture. The Energy Act 2023 enables revenue support contracts for low-carbon hydrogen and carbon capture, discussed in our note on hydrogen and CCUS business models.
Public procurement and subsidy control
Where a public body procures a project, the Procurement Act 2023 has governed new procurements since 24 February 2025, replacing the previous regulations with a more flexible competitive procedure and new transparency and debarment rules. Public support must also comply with the Subsidy Control Act 2022.
Public finance institutions
The National Wealth Fund lends and invests alongside private capital in clean energy and growth sectors. UK Export Finance supports exporters and overseas buyers of UK goods and services. Great British Energy invests in clean power, and the National Infrastructure and Service Transformation Authority (NISTA) oversees the infrastructure pipeline. The Autumn Budget 2025 confirmed a new PPP model, developed by NISTA, for neighbourhood health centres, while ruling out a return to PFI or PF2.
Scotland and Northern Ireland
Planning and consenting are largely devolved. In Scotland, large onshore generating stations are typically consented by Scottish Ministers under section 36 of the Electricity Act 1989 rather than through a development consent order, and Scots law governs land rights and security over Scottish assets. Northern Ireland has its own planning system and electricity market arrangements. Projects or portfolios spanning the UK need local counsel and separate security for each jurisdiction.
Investment screening
Many infrastructure assets fall within sensitive sectors under the National Security and Investment Act 2021, including energy, transport, communications and data infrastructure. Equity investments and some lender enforcement steps may need clearance; see our foreign investment and NSIA practice.
The contract structure of a project
Project finance lawyers London lenders instruct begin by mapping each contract to the risk it carries. The typical structure looks like this.
| Document | Parties | Main risk addressed | What lenders look for |
|---|---|---|---|
| Shareholders' agreement | Sponsors | Equity funding, governance and exits | Equity commitments, lock-ups and change of control limits |
| Construction (EPC) contract | Project company and contractor | Completion on time, to budget and to specification | Fixed price, date certain, liquidated damages, performance security |
| Operation and maintenance agreement | Project company and operator | Availability and operating cost | Performance regime, caps and replacement rights |
| Revenue contract | Project company and offtaker, CfD counterparty or public authority | Price and volume of revenue | Term matching the debt, termination compensation, change in law |
| Grid or connection agreement | Project company and network operator | Ability to export or import power | Connection date, capacity and curtailment |
| Land rights | Project company and landowners | Access and site security | Lease or easement term beyond debt maturity, no break rights |
| Direct agreements | Lenders and key counterparties | Lenders' step-in on default | Notice, cure periods and novation rights |
Risk allocation and bankability
Construction risk
Lenders prefer a single fixed-price, date-certain construction contract, so that delay and defects sit with one creditworthy contractor backed by bonds and parent guarantees. Many renewable and storage projects instead use several contracts for supply, installation and balance of plant, leaving interface risk with the project company. That can work, but lenders then expect more contingency, an owner's engineer and stronger sponsor support.
Revenue and market risk
A CfD or availability-based contract removes most price risk. Merchant exposure, through corporate power purchase agreements or wholesale sales, usually means lower gearing, shorter tenor and cash sweeps. Our article on corporate PPAs explains how offtake terms are negotiated.
Change in law, force majeure and termination
Long-dated projects must survive regulatory change. Public sector contracts usually compensate for discriminatory or specific changes in law, while general changes are shared or borne by the project. Termination compensation matters most: lenders need confidence that senior debt will be repaid if the contract ends for authority default, force majeure or even project company default.
Insurance
Construction all risks, delay in start-up, operational property damage and business interruption cover protect the cash flows lenders rely on. Lenders expect to be named as co-insured or loss payees, with non-vitiation protection so one insured's breach does not void cover for the others. Where cover becomes unavailable on commercial terms, the documents should say who bears the gap.
Inflation and interest rates
Revenue contracts that index to inflation pair naturally with inflation-linked debt or swaps, while fixed revenues need fixed-rate debt. Mismatches between indexation in the revenue contract, the operating cost base and the financing can erode cover ratios over a long tenor, so the model and the hedging strategy should be settled together.
The financing terms
Project loans are sculpted to forecast cash flow and protected by a cash waterfall, a debt service reserve account, distribution lock-ups tied to the debt service cover ratio, and hedging of interest rates and, where costs or revenues are in other currencies, foreign exchange. Project finance lawyers London borrowers engage early can negotiate realistic lock-up levels and cure rights before credit approvals harden.
From development to financial close and beyond
- Development and feasibility. Sponsors secure land rights, grid connection, consents and a revenue route, often funded by development equity.
- Procurement of contractors. Construction and operation contracts are tendered and negotiated with bankability in mind.
- Financing strategy. Sponsors choose between bank loans, institutional or bond debt, export credit or public institution participation, and appoint advisers.
- Lender due diligence. Technical, insurance, model audit, legal and market advisers report to lenders, and the financial model is finalised.
- Documentation. Common terms agreement or facility agreement, intercreditor arrangements, security, direct agreements and hedging are negotiated alongside the project contracts.
- Financial close. Conditions precedent are satisfied, equity is committed and first drawdown occurs.
- Construction and completion. Drawdowns follow lenders' technical adviser certificates until completion tests are met and operations begin.
- Operations and refinancing. Once construction risk falls away, many projects refinance at lower cost or sell down equity to long-term investors.
Documents and evidence lenders expect
- Consents: development consent order or planning permission, environmental permits and evidence that challenge periods have expired.
- Grid connection offer and agreement, with any queue position or reform-related changes.
- Land agreements, title reports and option or lease terms that outlast the debt.
- All project contracts, performance bonds, parent guarantees and warranties.
- Revenue contracts, CfD documents or public sector project agreement, with any qualifying change in law provisions.
- Financial model with an independent model audit, and the base case and sensitivities.
- Technical, insurance and environmental and social due diligence reports, including alignment with the Equator Principles where lenders have adopted them.
- Corporate documents, sponsor equity commitments and NSIA analysis.
Risks and common mistakes
Grid connection and consent timing
Many UK energy projects are constrained less by finance than by grid connection dates and consents. Connection reforms introduced by the system operator and Ofgem have changed queue positions, and judicial review can delay consent. Financing on a timetable that assumes the best case invites expensive waivers. Lenders and sponsors should test the documents against realistic delay scenarios, and consider our analysis of grid connection reform.
Contractor insolvency
Several UK contractors have failed in recent years. If the main contractor fails mid-construction, replacing it is slow and expensive. Performance bonds, retention, parent guarantees and step-in rights help, but only if they are sized properly and from creditworthy issuers. Lenders should review the contractor's financial position, and sponsors should avoid pushing so much risk onto the contractor that its price becomes unsustainable.
Mismatch between project contracts and the financing
Project contracts are often signed before lenders are involved. A construction contract with a low liability cap, an operations contract without step-in rights or a land lease with a landlord break can make the project unbankable. Renegotiating late weakens the sponsor's position. Involving finance counsel during contract negotiation avoids most of these gaps.
Termination compensation that does not cover senior debt
In public sector and long-term revenue contracts, the amount paid on early termination decides whether lenders are repaid. Formulas that pay only market value or exclude hedging break costs leave a funding gap. Lenders should model each termination scenario, including project company default, and sponsors should understand what equity is at risk in each.
Sanctions and supply chain exposure
Solar panels, batteries and turbine components often come through long international supply chains. UK and other sanctions, forced labour concerns and customs measures can delay deliveries or make equipment unusable. Supply contracts need sanctions and compliance warranties, alternative sourcing rights and clear allocation of delay. Lenders will ask about supply chain due diligence as part of their environmental and social review.
Comparing funding options
Project finance lawyers London sponsors work with will compare funding sources on cost, tenor and flexibility. Commercial banks remain dominant in construction, often through mini-perm loans that are refinanced after completion. Institutional investors and insurers provide long-dated private placement or bond debt, usually once projects are operational. Export credit agencies, including UK Export Finance and foreign agencies such as Bpifrance Assurance Export on Sizewell C, support projects that buy equipment from their countries. The National Wealth Fund can take risk that commercial lenders will not, but expects private capital alongside it.
Project bonds and private placements suit operating assets with stable revenue, such as regulated networks, availability-based PPPs and contracted renewables. They offer long tenors and fixed rates but are less flexible: waivers require bondholder processes, and construction risk is harder to place. Green bonds and green loans, documented against the ICMA and LMA principles, are now common for renewable and low-carbon projects, and lenders increasingly ask for credible use-of-proceeds reporting rather than labels alone.
Choose the refinancing route at the start. A construction loan with prepayment flexibility, assignable hedging and security that can be shared with future bondholders makes a post-completion refinancing much cheaper than one that must be unwound.
Refinancing and secondary sales of operating projects
Once a project is built and performing, its risk profile changes sharply. Sponsors often refinance construction debt with cheaper, longer institutional debt, release equity through a dividend recapitalisation, or sell stakes to infrastructure funds and pension investors seeking stable yield. The project finance lawyers London buyers and sellers instruct at this stage focus on different questions from those at financial close.
Buyers diligence the actual operating record against the original model, warranty claims still open against the contractor, remaining consent conditions, and any change of control restrictions in revenue contracts, CfDs, land agreements and the financing. Existing lenders' consent is usually required for a change of ownership, and NSIA clearance may be needed for the buyer. Hedging must be transferred or broken, and break costs priced into the deal.
For public sector projects, contracts may give the authority approval rights over new shareholders or share in refinancing gains. Reading those provisions before marketing the asset avoids a late surprise in negotiations.
Cross-border projects: Bangladesh, the Gulf and Asia
London is a common place to arrange and document projects located elsewhere, with English law loan agreements, London-seated arbitration and security under local law.
For an emerging-market project, the English law documents give lenders a reliable contract. Whether they give a reliable recovery depends on local security, exchange convertibility and the strength of the government support behind the offtaker.
Bangladesh has used private finance for power generation and other infrastructure, typically with a state offtaker, government support agreements and a public-private partnership framework. Lenders focus on payment security, foreign exchange availability and convertibility, and enforcement of awards. TRW & Co's Dhaka and London offices advise together on these structures; see our investing in Bangladesh practice and our guide to enforcing a London arbitration award in Bangladesh.
Gulf sponsors and sovereign funds are active investors in UK infrastructure and may require Shari'a-compliant tranches. Chinese, Singaporean and other Asian contractors and lenders often participate in projects across South Asia and Africa documented in London, raising sanctions, export credit and dispute resolution choices that should be settled early.
How TRW & Co helps
TRW & Co's London office is authorised and regulated by the Solicitors Regulation Authority. Our project finance lawyers London team advises sponsors, lenders, contractors and public bodies.
Financing documents
We negotiate facility and common terms agreements, intercreditor arrangements, security packages and direct agreements for construction and operating projects.
Project contracts
We draft and review construction, operation, supply and offtake contracts with bankability in mind, so they do not need reopening at financial close.
Energy and revenue models
We advise on CfD, cap and floor, RAB and corporate PPA structures, working with our renewable energy and energy teams.
Public sector and PPP
We advise on procurement under the Procurement Act 2023, subsidy control and the emerging PPP models for social infrastructure.
Refinancing and acquisitions
We advise on post-completion refinancings, project bonds and the acquisition or sale of operating infrastructure assets.
Emerging-market projects
We coordinate English law financing with Bangladeshi and other local law advice, government support and enforcement planning.
See also our infrastructure and construction practices, or browse all our practices.
Checklist for decision-makers
- Map every material risk to a contract and a creditworthy counterparty.
- Confirm consents, grid connection and land rights will outlast the debt and survive challenge periods.
- Test the revenue model against delay, low output and change in law scenarios.
- Check that project contracts include step-in rights and liability caps lenders will accept.
- Model termination compensation in every termination scenario.
- Screen the investment and any enforcement scenario under the NSIA.
- Plan the refinancing route at financial close.
- For overseas projects, settle convertibility, government support and enforcement before signing.
To discuss a project with our project finance lawyers London team, contact us, email info@trw.co or call +880 1779 127165. Our London office is at Holborn Gate, 330 High Holborn, London WC1V 7QH.
Frequently asked questions
01What makes a project bankable?
Lenders need predictable cash flows and protection against the main risks. In practice that means secure land rights and consents, a revenue contract or support mechanism long enough to repay the debt, a creditworthy construction contractor taking completion risk, an experienced operator, adequate insurance and step-in rights through direct agreements. The financial model must show enough debt service cover under downside cases. Gaps can sometimes be filled with sponsor support, but that dilutes the limited-recourse benefit.
02How does a Contract for Difference support project debt?
A CfD pays the generator the difference between an agreed strike price and a market reference price, and the generator pays back when market prices exceed the strike price. This stabilises revenue for the contract term, so lenders can size debt against a predictable income stream. CfDs are awarded through allocation rounds, with the Low Carbon Contracts Company as counterparty. Lenders review milestone requirements, termination rights and the consequences of delay before relying on one.
03Is PFI coming back in the UK?
Not in its old form. The government has ruled out returning to PFI or PF2, but its 10 Year Infrastructure Strategy said it would consider public-private partnerships where there is a revenue stream, appropriate risk transfer and value for money. The Autumn Budget 2025 confirmed a new PPP model, developed by NISTA, for neighbourhood health centres, and openness to private finance for public estate decarbonisation. Details of risk allocation and contract terms are still emerging.
04What is a direct agreement?
A direct agreement is a contract between the lenders, or their security agent, and a key project counterparty such as the construction contractor, operator or offtaker. It requires the counterparty to notify lenders before terminating for project company default, gives lenders time to cure and allows them to step in or transfer the contract to a new owner. Without direct agreements, a lender's security over the project contracts could be worthless if the counterparty terminates first.
05Do infrastructure investments need NSIA approval?
Many do. Energy, transport, communications, data infrastructure and several other sectors are covered by mandatory notification under the National Security and Investment Act 2021. Acquiring shares or voting rights above the statutory thresholds in a company active in those sectors requires clearance before completion. Taking security over shares is not usually notifiable, but enforcement that transfers control may be. Sponsors and lenders should screen at the outset.
06Why are many UK infrastructure disputes resolved by arbitration or adjudication?
Construction contracts in England and Wales are subject to statutory adjudication, which gives a fast interim decision on payment and other disputes. Project agreements with international parties often choose London-seated arbitration for final resolution, because awards can be enforced in most countries under the New York Convention. The financing documents usually stay with the English courts. Aligning dispute clauses across contracts avoids parallel proceedings.
07Can TRW & Co help with projects in Bangladesh financed from London?
Yes. Our London office advises on English law financing, security and project documents, while our Dhaka office advises on Bangladeshi approvals, government support arrangements, local security and enforcement. Lenders to Bangladeshi projects usually focus on the creditworthiness of the state offtaker, foreign exchange convertibility and the enforceability of arbitral awards, and we coordinate advice on each.
Sources and official materials
- Planning Act 2008 — Development consent for nationally significant infrastructure
- Planning and Infrastructure Act 2025 — Consenting and planning reforms, Royal Assent December 2025
- GOV.UK: Contracts for Difference — Government collection on the CfD scheme and allocation rounds
- Nuclear Energy (Financing) Act 2022 — Regulated asset base model for nuclear projects
- Procurement Act 2023 — Public procurement regime in force from 24 February 2025
- National Wealth Fund — UK public investment bank lending alongside private capital
- National Infrastructure and Service Transformation Authority — Infrastructure strategy, pipeline and PPP model development
General information only, current as at 21 October 2026. It is not legal advice and does not create a solicitor–client relationship. It reflects the law of England and Wales unless stated otherwise; Scotland and Northern Ireland have separate legal systems, and the law changes frequently. Check current official sources and take advice on the facts of your matter.