Update on PFI debt refinancing and the PFI equity market

Findings from this NAO report include that the government has secured gains of GBP 137 million from Private Finance Initiative (PFI) debt refinancings under new arrangements introduced by the Treasury in 2002, including GBP 102 million from four large refinancings (one of the London Underground contracts and three hospital projects: Norfolk and Norwich, Darent Valley and Bromley).

The NAO found that the new sharing arrangements through a voluntary Code appear to be generally working well but there have been exceptions, for example in three road projects the public sector missed out on at least GBP 1.7 million because gains were not shared in accordance with the voluntary code.

The report also describes the emergence of the PFI secondary market, which is enabling equity investors in PFI projects to sell their shares on to new investors.