Project finance and the relevance of step-in and stepout rights

Abstract

 At a time when we are seeing a resurgence of large public projects, this article examines the contractual dynamics of projects financed under a project finance model and the resulting impact on the performance of the administrative contract, based on the paradigmatic model of the concession under a public-private partnership (PPP) regime. We focus on the right to step-in (and step-out) as the ultimate consequence of the importance of the financial structuring of the project, which allows the financiers to directly or indirectly control the concessionaire in the face of a breach or imminent breach of its contractual obligations, as the main way to ensure the maintenance of the project and hence the repayment of the debt. In this context, we propose to discuss the application coordinates of article 322 of the Public Procurement Code, a legal provision which has remained unchanged and which, in the current context, may arouse new interest and rethinking.