It is usual for a supporting agreement, known as a services agreement, to be entered into between the SPV and the Islamic funder.
As the Islamic funder has title to the PPP project asset, it therefore has a responsibility to operate, maintain and insure that asset. This will take time and money. However, the Islamic funder’s responsibilities can be met through putting in place a services agreement. The services agreement is an arrangement whereby the SPV acts as the Islamic funder’s agent. Under it, the SPV manages the asset that it has leased from the Islamic funder. In return for a fee, the SPV pays for all of the costs associated with the management of the asset. The management will include carrying out such activities as day-to-day operational management and maintenance of the PPP project asset, as well as meeting the cost of putting in place the project insurances.