NPD and revenue funded projects

Non profit distributing and revenue funded projects

Our team has a long track record of acting for all parties involved in stand-alone capital infrastructure projects procured through the Non Profit Distributing (NPD) and other revenue-funded models.

We have been involved in the majority of the NPD projects closed and procured in Scotland.

The NPD model is the Scottish Government’s model for revenue funded projects. The structure of the NPD model is similar to the hub DBFM model but is used for single projects which are specifically procured by a public sector body. 

The key feature of the NPD model is that the Project Company established to pursue the project is not permitted to distribute any profits to its investors. The Project investors returns are therefore capped as returns may only be made through subordinated debt.  Any surpluses generated by the Project Company are to be paid over the procuring authrity. 

Additionally NPD project companies have a director appointed by the public sector (currently through Scottish Futures Trust) whose role is to ensure that the project company is operated as efficiently as possible to maximise such surpluses.  Such director also monitors the project to seek opportunities for refinancing which will provide a benefit to the public sector and can force the Project Company to undertake such opportunities.  

Our extensive NPD experience demonstrates our high level of expertise in this sector. We have been at the forefront of the development of the model as it has evolved.

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Our team also has extensive experience advising the public sector, project companies, investors and funders in connection with PPP model projects throughout the UK.

We are also have significant experience advising public sector clients, project companies and lenders in respect of mature and operating projects in relation to the difficulties and other issues that often arise for example managing variations and change sought by the public sector to ensure the facilities constructed meet their evolving needs.