Generally speaking, the project company has to adequately plan its financial needs, building up in the financial plan the necessary contingent funds. Reserves for renewals and major maintenance have already been mentioned. Another common reserve, as requested by the lenders, is the debt service reserve to meet unexpected shortfalls in cash flows.

There is a risk of funding not being available at financial close or only being available at a significantly worse price (margin and fees) and conditions (including debt service cover ratio [DSCR] or maximum term) than anticipated. This risk is generally to be assumed by the private partner.

However, governments should proactively work to mitigate this risk in advance by doing a proper appraisal (including market tests as described in chapter 4).

Financing the asset is an essential obligation in a PPP, and the risks of availability and cost of the financing should generally be borne by the private partner (with the exception and to the limit established in the contract in those projects under a co-financing scheme – see chapter 5.4).

When, as is commonly the case in most PPPs, the asset will be "handed back" to the authority at the end of the contract, this should be done in an appropriate physical state. The authority should not be exposed to the risk of the asset having a short remaining life, a low residual value, or being in an improper technical state. The contract should clearly define what technical state the asset has to meet at the contract expiration date within the hand-back requirements/specifications.

The risk of the taxation framework changing during the course of a contract is generally borne by the private partner when referring to taxes that are part of the common business environment, with exceptions.

Technological obsolescence risk refers to the risk of certain equipment becoming inadequate for the purpose of the service — or the service becoming poorer in comparison with more recent services being provided in the course of the project. When the private partner is exposed to market risk (competition for the service), this risk shall be generally borne by the private partner who will have a natural incentive to implement changes in technology.

General project company costs

General company costs include the permanent staff of the company, which is usually more of an administrative centre with limited personnel. For instance, it could include staff to manage the finance of the project and interact with the procuring authority and the lenders.

Maintenance risk may refer to the risk of improper maintenance resulting in a lack of performance, which is implicit and covered in availability and performance risk analysis.

But maintenance risk also refers to the risk of higher costs for maintenance operations and plans (including current maintenance and life-cycle costs). This is the focus of the risk in this section.

This risk refers to the risk (especially from the public perspective) of the infrastructure not being available to use and/or not meeting the quality or expected performance levels. This risk is borne by the private partner as it is the essence of the PPP objectives. The mechanism to transfer the risk is the payment mechanism (in government-pays) which allows for reductions in the payments to the extent that the private partner is failing to meet the requirements, including the ability to step in or ultimately terminate by default (see sections 8.2 and 8.3).