Jurisdiction(s):
United Kingdom

Key definition

Project company definition

What does Project company mean? In PPP/PFI procurement, a project company is the special purpose vehicle (SPV) incorporated by the winning bidder to enter into the project agreement (for example, a PFI Project Agreement, PPP agreement or concession agreement) with the public authority and deliver the project. It ring-fences project risks and cashflows, is usually a company limited by shares owned by the sponsors, and raises limited‑recourse project finance. The project company receives the unitary charge or user revenues, lets the key sub‑contracts (construction/DB and O&M/FM), grants security over its assets and shares, and enters into direct agreements with lenders and the authority to provide...

Project finance offtake agreements: lenders' key concerns on take-or-pay, pricing, credit support, risk allocation, term, force majeure, assignment and extensions

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Practice notes

Most projects rest on a dense network of contractual ties linking all key participants in the scheme (eg the project company, equity investors, contractors, sub-contractors, offtakers and suppliers). Taken together, these contracts are commonly termed the ‘project documents’ in practice (see: Project documents—issues for lenders—overview). In projects focused on the production or exploitation of a product (eg a power project or a mine project), offtake agreements are also generally regarded as some of the principal project documents indeed.

What is an offtake contract?

An offtake contract is an agreement under which a third party (the offtaker) undertakes to purchase a defined quantity of the product generated by a project at an agreed price. The product is usually a commodity such as oil, gas, minerals or power. The purpose of an offtake contract is to:

secure a predictable revenue stream for the project, and
ensure there is a guaranteed buyer for project production (particularly where demand for the product may fluctuate)

It is not always mandatory for the project company to enter into offtake contracts, however...

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Web page updated on 21/05/2026

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