Glossary
Lending to a specific infrastructure or energy project where repayment comes from the project's own cash flows and security is taken over its assets.
Project Finance
from Energy & Technology
Large energy and infrastructure projects are typically funded through project finance — a structure where lenders are repaid from the project's own cash flows rather than the sponsor's balance sheet. The project is housed in a special purpose vehicle (SPV), ring-fencing risk. A key concept is bankability: whether the project's contracts and risk allocation are robust enough for lenders to commit capital. Lawyers draft and negotiate the full suite of project documents — the power purchase agreement (PPA), the construction contract (often on an EPC basis), and the financing agreements. Getting the risk allocation right between sponsors, contractors, offtakers, and lenders is the core of the work.
SPV (Special Purpose Vehicle)
A legally separate entity created to isolate the financial risk of a specific project, so that the sponsor's other assets are not exposed if the project fails.
PPA (Power Purchase Agreement)
A long-term contract between an energy generator and a buyer, fixing the price and volume of electricity to be supplied — essential for project bankability.
Net Zero
The target of balancing greenhouse gas emissions produced with those removed from the atmosphere, legally binding in the UK by 2050.
Bankability
Whether a project's risk profile and contractual framework are acceptable to lenders for the purpose of providing project finance.
UK GDPR
The UK's own version of the EU General Data Protection Regulation, governing how organisations process personal data. It began as a straight copy but has genuinely diverged since the Data (Use and Access) Act 2025 amended it.
RAB (Regulated Asset Base)
A funding model where investors earn a regulated return on capital deployed during construction, reducing risk and lowering the cost of finance for large infrastructure projects.
EPC Contract
An Engineering, Procurement, and Construction contract under which a single contractor takes responsibility for delivering a project to a fixed price, time, and specification.
Carbon Credit
A tradeable certificate representing the right to emit one tonne of carbon dioxide, used in compliance and voluntary carbon markets.