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FID meaning

Published by a LexisNexis Energy expert
What does FID mean?
FID (Final investment Decision) describes the point at which a project’s sponsors or company board formally approve proceeding with a development, commit capital expenditure and authorise entry into binding project contracts. It is a widely used commercial term in project finance and energy/infrastructure transactions and is not generally defined in UK or Irish legislation or case law. Typical features include: board or investment committee approval; confirmation of project economics; satisfaction (or waiver) of key conditions such as financing, planning and environmental consents, land rights, supply/offtake arrangements and major construction (EPC) terms. FID may precede, coincide with or follow financial close. After FID, withdrawal usually carries exposure to break fees and contractual liabilities. In the nuclear sector, FID marks “project sanction” once regulatory licences, planning permission, financing structure (for example, under a CfD or RAB model), governmental approvals and major supply chain commitments are in place. Usage is broadly consistent across England & Wales, Scotland, Northern Ireland and Ireland, though the corporate approvals mechanics derive from the relevant company law. Transaction documents (joint venture, shareholder, development and SPA agreements) often set long‑stop dates for FID and allocate termination or step‑in rights if FID is not achieved.
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NEWS
UK subsidy control update: Subsidy Advice Unit final reports on Sizewell C schemes and Energy Intensive Industry nuclear RAB exemption; upcoming dates (17 June 2024)

Subsidy Control The Subsidy Advice issued its final report giving guidance to the Department for Energy Security and Net Zero on the proposed Sizewell C FID Scheme—see report for more The Subsidy Advice published its final report advising the Department for Energy Security and Net Zero on the proposed Sizewell C Development Expenditure Scheme—see the report for details The Subsidy Advice Unit delivered its final report offering advice to the Department for Energy Security and Net Zero and the Department for Business Trade on the proposed Energy Intensive Industry Exemption from Nuclear Regulated Asset Base Policy Costs subsidy scheme—see the report for further information NOTE—For every decision referred to the Subsidy Advice Unit under the Subsidy Control Act 2022, see further, UK subsidy control—cases tracker Upcoming dates For dates of forthcoming UK competition developments, see further, UK Competition calendar...

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NEWS
UK competition law update: SAU to report on energy subsidy schemes; CMA extends Google Play and Apple App Store investigations; CAT adds JD Sports in Sports Direct v Newcastle United

Subsidy Control SAU accepted requests from DESNZ/DBT on the proposed EII Exemption from Nuclear RAB Policy Costs; from DESNZ/UK Infrastructure Bank on the proposed Sizewell C FID; and from DESNZ on the proposed Sizewell C Devex—see further, case pages. NOTE—For all SAU referrals under the Subsidy Control Act 2022, see further, UK subsidy control—cases tracker. Antitrust CMA extended its Chapter II CA 1998 probe into Google’s Android app distribution, notably Play billing rules; review of responses to proposed commitments continues to June 2024—see further, case page. CMA also prolonged its Apple iOS/iPadOS inquiry on App Store access terms; analysis now runs from April to June 2024—see further, case page. NOTE—For all live behavioural CMA investigations, see further, UK behavioural investigations—ongoing cases tracker. Private actions The CAT’s order (1 May 2024) in SportsDirect.com Retail Ltd v Newcastle United Football Company Ltd and Newcastle United Ltd concerns a s47(1) CA 1998 damages claim alleging...

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View the related Practice Notes about FID

PRACTICE NOTES
From CfD Signature to Commissioning: Legal Guide to Milestones, Conditions Precedent, Capacity Adjustments, Termination Rights and AR1–AR7 Contract Changes

Practice Note This Practice Note sits within our suite of comprehensive guidance on the key provisions of the standard form Contract for Difference (CfD), issued to renewable electricity generators through the CfD allocation rounds run to date. The emphasis here is on the CfD terms that apply from signature up to the point a project is commissioned, when payments under the CfD commence. Our other relevant Practice Notes in this series include: Detailed guidance on the terms of the standard form Contract for Difference (CfD): from commissioning to expiry — offers complementary guidance on the CfD provisions that apply once a project has been commissioned and subsidy payments have begun Contracts for Difference (CfD) — key features — sets out a detailed overview of the CfD regime as a whole, including the pre‑contract legislative process for awarding standard form CfDs and the types and variants of standard and non‑standard CfDs awarded to date Investment contracts — early contracts for difference (CfD) [Archived] —...

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