I INTRODUCTION

The newly elected French president has created a more favourable climate for project investments by notably introducing more flexibility into employment law and reinforcing tax stability. Until the 1990s, the market for project finance was centred on concessions, which have historically played a key role in the development of infrastructure in France. Because of legal constraints, project finance schemes were usually not available in sectors with no or non-significant payment coming from end users (e.g., health, education, law and order). This changed gradually until a general framework was adopted for partnership agreements in 2004. Multiple waves of projects were then successfully launched, starting with hospitals and prisons, railway infrastructure, stadiums and universities.

Project finance played a key role in the French stimulus plan for the economy during the 2008 financial crisis. Major railway projects were launched to keep the market active, most notably the SEA high-speed link, one of the largest project finance transactions in Europe.

Project finance has also been one of the major tools of the French energy transition with 7.7GW of solar projects and 13.4GW of onshore wind projects having reached commercial operation.

France was the largest market for public-private partnerships (PPPs) in 2011. It is now a mature market, with practices, legal structures and precedents that foreign investors are often familiar with.

Because of the leading position of the French construction contractors, most notably Vinci, Bouygues and Eiffage, the French construction market has always been difficult to penetrate for foreign players.

The financing market, on the other hand, has always seen foreign investors and banks playing a major role in project finance, alongside the main French banks (Société Générale, Natixis, CA-CIB and BNPP) and the key public sector participants (the Caisse des Dépôts et Consignations and the European Investment Bank (EIB)).

In 2017, the Cour des comptes2 harshly criticised the costs of PPP projects implemented by the French Ministry of Justice. Shortly thereafter, the European Court of Auditors pointed out in early 2018 that PPPs 'cannot be regarded as an economically viable option for delivering public infrastructure' as the audited 12 EU financed PPPs, including in France, 'suffered from widespread shortcomings and limited benefits, resulting in €1.5 billion of inefficient and ineffective spending'. The European Court of Auditors underlined that 'value for money and transparency were widely undermined in particular by unclear policy and strategy, inadequate analysis, off-balance-sheet recording of PPPs and unbalanced risk-sharing arrangements'.3 Most strikingly, its first recommendation is for Member States not to promote more intensive and widespread use of PPPs until the identified issues have been addressed.

The role of foreign players in the French market should increase in the coming years despite the somewhat protectionist image attached to France and the anticipated decline of PPPs as a project finance tool, with key opportunities to enter the French market arising from the development of the energy and brownfield markets (see Section II).

The energy market has continued to grow during the past decade. The renewable energy market is particularly booming owing to successive governmental policies which have made a priority of renewables and aim to phase out France's coal-fired power plants by 2030 and reduce the size of nuclear energy in the overall generation capacity.

II THE YEAR IN REVIEW

The greenfield infrastructure market has seen a significant reduction in size since 2013 because of the stimulus plan for the economy coming to an end, the lack of need for new infrastructure after the completion of the previous waves of projects, and the new government not being very enthusiastic about PPPs. However, PPPs as PFI projects in the UK, are more harshly criticised as an inefficient model owing to their lack of flexibility and the significant costs they imply for contracting authorities for the whole duration of a PPP contract compared to more traditional project finance contractual tools, such as concessions.4

Project bonds financings have become more popular, even for smaller ticket projects, since competition in the debt market is increasing and they can offer finance for longer periods than conventional debt. For instance, the EIB has implemented its Project Bond Credit Enhancement instrument in the context of a partly paid project bonds issuance subscribed by Allianz funds for the purposes of financing a 50-year concession for the operation, extension and maintenance of the seaports of Calais and Boulogne-sur-Mer.

The year 2017 saw the refinancing of several major infrastructure projects, including the A19 (the first hybrid financing combining a loan and a bond issuance), the A150 toll roads and the SEA high-speed link (for which the discussions are ongoing owing to the traffic level, which will be lower than expected and the announced reform of the SNCF which may impact the PPP).

Following the privatisation of Toulouse, Nice and Lyon airports, the state is expected to privatise Aéroports de Paris (ADP) in 2018, which, inter alia, operates CDG, Orly and Le Bourget airports.

The secondary market for PPP projects also continued to strengthen in 2017, with sponsors considering the sale of portfolios of assets that had entered their operational phase. The development of the brownfield market should remain an important trend over the coming years.

The greenfield market for energy projects presents major future opportunities for project finance. Indeed, 2017 saw a record of 2,763MW of new renewable projects reach grid connection, of which 1,797MW of onshore wind, 887MW of solar and 48MW of hydro.5 Market participants expect to see volumes at least as high in 2018 for onshore wind and solar plants, on course to meet the government's objective of 52GW of grid-connected renewable capacity by year-end 2018 and keeping the 2023 target of 71–78GW in sight. Major projects are expected to materialise in the short to medium term including the first French offshore wind farms, carried by a joint venture between EDF EN and Enbridge, of which at least one is expected to reach FID and financial close in 2018. The year 2017 also saw the onshore wind market transition unabated from a feed-in tariff scheme (one of the last still available in Europe) to a feed-in premium scheme, whereby onshore wind farms now sell their electricity in the electricity market and receive from EDF the difference between spot market prices and a target remuneration designed to be sufficient to incentivise the development of new projects. This regime is expected to evolve in 2018, with the government looking to prioritise the development of onshore wind by awarding large projects through competitive bidding processes.

The brownfield energy market also continued to generate a sustained deal flow, with several sponsors seeking to benefit from the prevailing low interest rates to repackage their assets in larger portfolios and refinance them. There was also a number of exits, with several first-generation renewable funds reaching divestment phase and going to the market to sell their operational assets. The consolidation trend observed recently also seems to be picking up speed, with several smaller developers having been acquired by larger industry players.

In a nutshell, the French infrastructure market is now mature but there are still some major projects being launched and the brownfield market is well developed. France should remain one of the most attractive European markets in the renewables sector over the coming years. Going forward, many opportunities should materialise for foreign investors to enter the market, and in particular in relation to greenfield energy projects, either shovel-ready or in late development stage, and to airport privatisations and investments in other brownfield infrastructure projects

III DOCUMENTS AND TRANSACTIONAL STRUCTURES

i Transactional structures

PPP projects on the French market are typically developed by a special purpose vehicle (SPV). Historically, contractors saw the PPP market as an extension of the construction industry. As the market has matured, sponsors have become more diverse and now include the concession division of such contractors and specialist financial investors such as Ardian, CDC Infrastructure, Macquarie, Marguerite, Mirova and Meridiam.

PPP projects are structured as build-operate-transfer schemes. Renewable energy projects are privately owned.

ii Documentation

In infrastructure projects, the SPV typically enters into a PPP contract with the public sector, and into engineering-procurement-construction (EPC), operation and maintenance (O&M) and financing contracts. In onshore renewable energy projects, the SPV usually enters into an offtake contract with a private aggregator and a feed-in premium contract with EDF, and into EPC (often on an un-wrapped basis), O&M, grid connection and access arrangements as well as financing contracts. Offshore wind projects enter into a power purchase agreement with EDF, a customised grid connection agreement with RTE and develop their own suite of unwrapped construction and O&M arrangements with various contractors. Depending on the complexity of the project, other agreements can be required, such as interface agreements to deal with interfaces between construction and maintenance, and direct agreements between the lenders, the contractors or the public sector.

iii Delivery methods and standard forms

PPP contracts are not standardised, although concessions granted at state level tend to be very similar. MAPPP, the French PPP task force, has suggested standard terms, but their use is not mandatory.

The International Federation of Consulting Engineers (FIDIC) documents are well known by French players and used for inspiration, although the major French construction contractors usually use their own standard documents as a basis for discussions.

For renewable energy projects, grid connection and access documents to be entered into with the grid operator are standardised for each technology, as is the feed-in premium contract (or power purchase agreement for offshore wind projects) entered into with EDF. Aggregation contracts for onshore wind and solar projects, although slowly converging towards standardised risk allocations, are still evolving as their implementation is recent and the market has not matured yet. Construction and O&M contracts will usually follow the standard documents proposed by contractors.

IV RISK ALLOCATION AND MANAGEMENT

i Management of risks

The management of risks is in line with international project finance standards and based on widely accepted principles, such as the transparency and 'back-to-back' principles that govern the relationships between the SPV and its subcontractors.

On the PPP market, the risk of a third-party challenge required specific treatment because of case law being unclear on certain issues, most notably the treatment of swap breakage costs in the case of judicial cancellation of the PPP contract. This was clarified by the Ordinance relating to Public Procurement,6 which provides that, in the event of an early termination of a PPP contract, the costs incurred by the sponsor, relating to the financing of the PPP contract, incurred by the sponsor, including swap breakage costs, can be reimbursed if they have been useful for the public entity counterparty to the PPP contract. Specific arrangements, known as 'tripartite' agreements, have often been made available by the public sector to cover such costs should a PPP be held invalid as a result of a challenge.

ii Limitation of liability

Limitation of liability is accepted under French law, except in a few cases, notably gross misconduct. Public sector clients, however, cannot accept a complete exoneration of liability.

In PPP projects, the liability cap of the construction contractor is often around 20 to 40 per cent of the contract price, with specific risks excluded from the cap (e.g., penalties payable by the SPV to the public sector and gross negligence). The liability cap of the O&M contractor is generally equal to one or two years of payments under the O&M. While PPP, EPC and O&M contracts regularly include liquidated damages provisions, a court can revisit them if it considers them to be unreasonably high or low.

As a general principle, contractors cannot be held liable for the consequences of force majeure.

iii Political risks

Although projects in France are not totally immune from political risks, as demonstrated by the payment of compensation in the Ecotaxe project by the government and the renegotiation of the motorway concession contracts, political risk is not seen as a major cause for concern given the protective legal and institutional framework.

PPP contracts can be unilaterally modified or terminated on general interest grounds, but the contractor is entitled to full indemnification of the damage resulting from such a decision. PPP contracts generally provide for protection against changes in law that would specifically affect the project. Such protection is also offered under case law under the theory known as fait du prince, which entitles contractors to indemnification in the event of unilateral measures affecting the performance of a contract. Another theory, imprévision,7 offers protection where unforeseeable situations have a significant impact on projects, which can cover civil disturbances and other political risks to some extent.

PPP contracts do not normally include any termination provisions in favour of the SPV. However, the SPV will be entitled to seek termination of the PPP contract and recover compensation for its losses (including loss of profits) in the event of material breach by the public-sector authority.

The rights of foreign investors, including property rights, are protected under the Constitution in the same way as those of French citizens and corporate bodies. Expropriation is possible, but only to the extent that it serves a general interest purpose and that appropriate indemnification is paid prior to expropriation. Nationalisations are possible, provided that indemnification is paid. There have been no examples since the early 1980s, when the socialist government nationalised major French corporates and French banks, which were then privatised a few years later. There is a recent example of abandonment of a project with the airport concession of Notre-Dame-des-Landes awarded to Vinci. The government finally decided to abandon this arguable project, following years of land occupation by opponents and violent riots, and to compensate the concessionaire.

Because of this protective legal framework, the intervention of the Multilateral Investment Guarantee Agency or other similar ECAs' cover of the World Bank Group is not considered necessary when acting on the French market.

V SECURITY AND COLLATERAL

Finance parties involved in the financing of projects in France are secured by way of a standard security package, which mainly includes an assignment by way of security under Articles L. 313-23 et seq. of the French Monetary and Financial Code (the Dailly assignment) over certain receivables held by the SPV in the context of the project.

The package typically includes pledge agreements in respect of the shares of the SPV, the bank accounts and other movable assets and direct agreements. There is no equivalent in France to the floating charge found under English law, although specific security can be put in place for specific classes of assets.

In the context of the financing of greenfield renewable energy projects, the finance parties often also benefit from a mortgage on the real estate assets of the project, albeit securing a limited value mainly given the costs associated with the constitution of this type of security in France which are calculated based on the amount of the debt secured by the mortgage. Mortgages are also sometimes seen in brownfield renewable energy projects.

For projects on the French market, the main security remains the Dailly assignment, through which the core receivables of the project8 are assigned in favour of the lenders. Although such an assignment may only benefit lenders (as opposed to hedging banks, whose interest is equally protected through specific contractual and security arrangements), it is usually considered as a strong, bankruptcy remote instrument as it grants to the finance parties full title over the assigned receivables. On PPP projects, lenders may also benefit to some extent from an 'accepted' Dailly assignment, whereby, after completion of the construction phase, the public authority is statutorily prevented from raising any defence on the grounds of the PPP agreement against the lenders benefiting from the accepted Dailly assignment. This makes the underlying loan immune from the risks of the project and results in a structure comparable to a loan extended directly to the public authority.

Standard step-in rights are usually available on projects, although the consent of the public sector will be required before substituting a new entity to the initial project company.

VI BONDS AND INSURANCE

i Bonds

Standard bonds for projects in France are performance bonds and parent company guarantees.

Bid bonds are not standard in the context of French PPPs. However, for particularly large projects (such as the €7.8 billion SEA high-speed link), the bidding consortium is, in some cases, requested to provide a bid bond to ensure that it will reach financial close within the required period. Bid bonds will, however, have to be issued in favour of the State in the context of renewable energy projects awarded through competitive bidding processes.

The EPC contractor usually provides the SPV with a performance bond, to secure performance of its obligations under the EPC contract. Such bonds are usually in the form of first demand bank guarantees issued by financial institutions with a specified credit rating.

Defects liability risks are generally covered through contractual mechanisms and parent company guarantees. However, for important projects, construction contracts may provide for a warranty bond to be issued by a financial institution on behalf of the EPC contractor to cover the defects liability period.

Parent company guarantees are generally required in the form of a suretyship (a specific form of performance undertaking) and issued to secure the contractual obligations of both EPC and O&M contractors.

In addition, French law provides that the EPC contractor guarantees civil works for a period of 10 years (known as the decennial guarantee) from the completion date of the works.

ii Insurance

Insurance coverage of the project is divided between the SPV, the EPC and the O&M contractors. Standard insurance policies include construction all-risk, delay in start-up, business interruption and third-party liability risk. With respect to the insurance policies subscribed by the project company, the finance parties usually request to be included as co-insured or loss payee.

VII ENFORCEMENT OF SECURITY AND BANKRUPTCY PROCEEDINGS

In France, security interests can generally be enforced when the secured claim is due. Security interests are enforced in different ways, such as contractual foreclosure of title, sale of pledged assets at public auction or petition to court for asset appropriation.

Insolvency proceedings may limit the possibility of enforcement. Ahead of any cash-flow insolvency situation, French companies may seek protection from their creditors through a safeguard procedure whenever they are not able to overcome difficulties. Once cash-flow insolvent, only reorganisation or liquidation proceedings are available, the latter when the rescue of the debtor is manifestly impossible.

During these proceedings, and subject to certain exceptions, enforcement of security interests and actions for payment of pre-petition debts are frozen. This automatic stay applies during the 'observation' period, which may last up to 18 months. If a plan to continue the business is approved by the court, the secured creditor may still not be able to enforce the security or exercise its acceleration rights to the extent the plan is complied with.

Certain security interests, such as the Dailly assignment of receivables, are not affected by the above pre-insolvency and insolvency proceedings.

French public law entities are immune from bankruptcy proceedings and from private law enforcement measures. This does not mean, however, that judgments against French public entities are unenforceable. Under a law of 16 July 1980, where a final judgment has been made against a public entity ordering the payment of a sum of money, the payment must be ordered within two months, otherwise, the representative of the state or the supervising authority for the entity in question must make the order.

If there are insufficient funds available to the public entity to meet the payment, the supervising authority must issue an injunction against the entity ordering that the necessary resources be created or made available (e.g., raise new taxes). If the public entity does not comply with the injunction, the supervising authority can impose it on the public entity or raise the necessary resources. Should the supervising authority fail to act as provided in the law, an action could be brought against the state for breach of its duties. Such an action could potentially result in the state being ordered to pay damages to the creditor for breach of public duties.

Ten years after its introduction into the French Civil Code, the regime of the security agent has been substantially reformed.9 The new provisions came into effect on 1 October 2017 and offer a legally straightforward and simplified system as competitive as the one governed by English law under the trust scheme.

The French legal framework for bond issues has also been modernised10 to foster the development of this debt instrument on the French market.11

VIII SOCIO-ENVIRONMENTAL ISSUES

i Licensing and permits

As is generally the case throughout Europe, the main permit to be obtained is usually a building permit. Large projects often require a public enquiry. On major infrastructure projects or on renewable projects, specific environmental permits (Water Law, and Regulation on Classified Installations permits) may be required.

ii Compliance

The Sapin II Law introduced new compliance obligations into French law to prevent corruption. Companies with at least 50 employees are obliged to set up warning procedures for processing alerts raised by whistle-blowers, particularly in relation to violations of environmental regulations or risk of damage to the environment. Larger companies with at least 500 employees and a turnover of €100 million12 have to implement various compliance measures against corruption, including an audit of the risks, a code of conduct and training programmes. Company directors are personally liable in respect of these obligations and criminal penalties can be imposed.

In addition, a new French law on the corporate duty of care13 applicable to major French groups having at least 5,000 employees in France or 10,000 employees in France and abroad requires to set up a vigilance plan concerning corporate social responsibility.

iii Equator Principles

The documentation for French projects does not refer to the Equator Principles, given that French environmental law is considered to require at least equivalent standards.

iv Responsibility of financial institutions

Lenders to an SPV have very few obligations under the finance documentation other than to make the debt available. The only real exception is on the exercise of step-in rights under a direct agreement. Another exception is the requirement on lenders to disclose the global effective interest rate being charged to the SPV under the finance documents. Failure to do so may lead to an inability to recover the difference between the statutory interest rate (which is very low) and the margins included in the loan.

IX PPP AND OTHER PUBLIC PROCUREMENT METHODS

i Transposition of EU directives applicable to public procurement and concessions

Following the adoption by the European Union of modernised public procurement and concession rules on 11 February 2014,14 transposition works resulted in a simplification of the procurement rules, and, in particular, of rules applicable to PPP contracts and concessions.

Two main sets of rules were enacted: the Ordinance relating to Public Procurement and its implementing decree transposed the European Directive on public procurement and reunite all rules applicable to procurement contracts;15 and the Ordinance relating to Concession Contracts and its implementing decree transposed the European Directive on the award of concession contracts and clarified the existing legal framework (replacing most notably a law dated 1993 known as the Sapin Law).16 This legislation should be compiled by the end of 2018 in a Code of Public Procurement.17

As a result of these new rules, multiple tools allowing the occupation of the public domain, formerly also used in PPP transactions in various sectors to satisfy the needs for works, furniture and services of public entities, have been confined to their original function, that is the occupation of the public domain.

As from now, the 'partnership procurement', along with concessions, shall be the sole available tools for PPP transactions.

ii Partnership procurement and concessions

The rules in relation to PPPs are now included in public procurement law by the Ordinance on Public Procurement, which replaces the partnership agreement with the partnership procurement as a subcategory of procurement contracts.

French public procurement law dates back to the 1830s and has been a key source of inspiration for European public procurement law. The French and European public procurement processes are based on the same principles: equal treatment, transparency, proportionality and the proper use of public funds.

Where there is no payment from end users, the partnership procurement is available, but only to the extent that the project has specific advantages compared with traditional procurement. The procurement value also must exceed a certain threshold (€5 million for infrastructure, notably in the energy, transport, urban planning and waste water sectors).

In contrast, concessions are allowed in almost all sectors where end users pay for the service (or at least for a significant part of its costs).

The procurement process for partnership procurement is like traditional public procurement. The new rules have extended the option to use the competitive dialogue procedure and the 'competitive procedure with negotiation', the use of both of which is widespread in relation to PPPs. The negotiation procedure remains the rule for concessions (a call for tenders is mandatory before negotiations begin).

Unsuccessful bidders can challenge the procurement process before administrative courts through an emergency hearing, the 'pre-contractual action'. This procedure suspends the conclusion of the contract.

Once the contract is signed, the contract itself can be challenged before courts, but its implementation is not suspended. An emergency hearing (known as a 'contractual action') is available to unsuccessful bidders to challenge the contract where blatant violations of public procurement law are involved.

iii Rules relating to the sale of shares by the state

The rules relating to the state's intervention as a shareholder, and to companies in which the state holds (directly or through public entities) share capital, were substantially amended in August 2014. This reform aimed to bring the status of the state as a shareholder closer to that of ordinary shareholders, and to simplify governance rules as well as rules relating to transactions on the share capital of public companies (i.e., companies where the state owns the majority of the share capital or voting rights).

In addition, the Macron Law completed and further simplified the rules applicable to the sale of shares by public entities by repealing almost entirely the old 'privatisation laws' dating back to the 1990s. The Macron Law also provides that privatisations carried out by local authorities, or their groupings, involving companies with a turnover or staff exceeding €75 million and 500 employees will be decided by the local assembly on the recommendation of the Commission for Shares and Transfers.

As announced by the government, the privatisation of ADP and Française des Jeux (FDJ), as well as the sale of shares in Engie and its subsidiary GRT Gaz (operating the gas public transmission network) is included in the Action Plan for Business Growth and Transformation draft bill (known as the draft PACTE bill), which was presented to the Council of Ministers on 18 June 2018. The legislative process for the adoption of this bill is expected to begin in September 2018.18

X FOREIGN INVESTMENT AND CROSS-BORDER ISSUES

As a general rule, free movement of capital is guaranteed in France, and foreign investors will in most situations be treated as French investors, either based on bilateral investment treaties or on the general principles at law.

However, in some cases, a prior declaration or authorisation can be needed before acquiring control of a company operating in certain sectors, the list of which has been recently revised in the context of the offer of General Electric to purchase part of Alstom. The list of sectors varies depending on whether the investor resides within or outside the European Union. It covers sectors such as defence, dual-use technology, energy, transportation, telecommunications and health. This list could soon expand and include the sectors of artificial intelligence, space, data storage and semiconductors following recent statements of the government in this respect.

Also, in view of the current developments in this field at EU level, with the proposed regulation by the European Commission in September 2017 to implement a European framework for screening of foreign investments on grounds of security or public policy, it could become necessary in the future, not only to ensure compliance with the rules applicable to foreign investments for foreign investors in France (inbound) but also to be more vigilant on the content of this type of rules for French investors abroad, including in a Member State of the EU (outbound).

France has a bank monopoly law whereby only credit institutions can make loans in the ordinary course (subject to some exceptions such as intragroup loans). To be a credit institution, banks must either be licensed or otherwise passported by the French Prudential Supervisory Authority (ACPR) or an equivalent regulatory authority in another EU country, provided notice is given to the ACPR of their activity in France.

XI DISPUTE RESOLUTION

i Special jurisdiction

Disputes between the public authorities and contractors relating to concessions, PPP contracts and more generally permits and authorisations for renewable projects are to be settled by administrative courts, because of the distinction between private and public law that exists in France, as in other continental European countries. This is also the case for disputes relating to power purchase agreements entered into for renewable energy projects.

The case law of administrative courts has often been more protective than that of civil courts. The doctrine of unforeseen circumstances, which can protect private parties from an upheaval due to unforeseen circumstances, has been applied by administrative courts for almost a century. Since the French contract law reform,19 the doctrine is also now implemented by civil courts. The existence of these specific courts has therefore not been a major concern for participants on the French market.

Disputes between the private parties involved in a project are settled by the civil courts.

ii Arbitration and ADR

Arbitration is not used by the French PPP market, despite Paris being one of the main centres for arbitration. As a general rule, arbitration is not available to French public entities. Provision has been made for an exception regarding partnership agreements, but it is generally not used.20

PPP contracts often provide for a preliminary amicable settlement phase before disputes can be taken to courts. Appointed experts can help in this phase, although their opinion is generally not binding on the parties.

Arbitration is available to private parties involved in French projects, but the parties usually choose national commercial courts for dispute resolution, even for major projects.

XII OUTLOOK AND CONCLUSIONS

In the past 10 years, the French projects market has become a mature market, with a stable legal regime and relatively stable market practices, despite the lack of standardised documentation.

Over the next few years, renewable energy should keep the market active for greenfield projects.

The secure assets of the brownfield market should remain attractive, and portfolios of medium-sized projects could create new opportunities for investors, including new opportunities to enter the market.


Footnotes

1 Paul Lignières is a partner, Mark Barges and Darko Adamovic are counsels, and Samuel Bordeleau and Marianna Frison-Roche are managing associates, at Linklaters LLP.

2 The French equivalent of the British National Audit Office.

4 This unpopularity has already resulted in the French Minister of Justice announcing that 7,000 prison cells and new courts of justice would not be built under PPP contracts.

6 Ordinance No. 2015-899 dated 23 July 2015 relating to Public Procurements as ratified and amended by the Sapin II Law, No. 2016-1691 dated 9 December 2016 relating to Transparency, Fight against Corruption and Modernisation of the Economy which created in its Article 39, a new Article 89 of said Ordinance.

7 The doctrine of unforeseen circumstances, which can protect private parties from an upheaval due to unforeseen circumstances.

8 Such as proceeds of the termination compensation that may be due by a public authority under PPP agreements, electricity offtake receivables or proceeds of the termination compensation that may be due by EPC or O&M contractors under their respective contracts with the SPV.

9 By Ordinance No. 2017-748 relating to the security agent.

10 By Ordinance No. 2017-970 of 10 May 2017 completed by decree No. 2017-1165 of 12 July 2017.

11 The reform simplifies the legal framework, cleans up the provisions of the French Commercial Code relating to the 'masse' and introduces to the French Monetary and Financial Code the possibility for the issuer and the holders of bonds to organise their relationship on a purely contractual basis.

12 Or part of a French group falling within these thresholds.

13 Law No. 2017-399 dated 27 March 2017 on the Corporate Duty of Care of Parent Companies and Controlling Companies.

14 Directive 2014/24/EU of 26 February 2014 on public procurement, Directive 2014/25/EU of 26 February 2014 on procurement by entities operating in the water, energy, transport and postal services sectors and Directive 2014/23/EU of 26 February 2014 on the award of concession contracts.

15 Ordinance No. 2015-899 dated 23 July 2015 and Decree No. 2016-360 dated 25 March 2016 relating to Public Procurement.

16 Ordinance No. 2016-65 dated 29 January 2016 and Decree No. 2016-86 dated 1 February 2016 relating to Concession Contracts.

17 Law No. 2016-1691 dated 9 December 2016 relating to Transparency, the Fight against Corruption and Modernisation of the Economy in its Article 38 authorises the government to adopt the legislative part of the Code by way of an ordinance.

18 The state owns 50.6 per cent of ADP and may decide to sell its shares to one single shareholder or to sell different blocks of its shares to different shareholders. It owns 72 per cent of FDJ. According to sources close to the matter, it is considering selling 30 per cent to 40 per cent of its shares and through an initial public offering, while retaining double voting rights to keep some control over the asset. The expected bill could authorise the state to hold less than 33 per cent of the shares in Engie on a permanent basis, which would allow the state to sell additional shares.

19 Ordinance No. 2016-131 dated 10 February 2016 on the Reform of Contract Law and of the Obligations Regime and Evidence Rules.

20 This tendency to settle disputes by reference to national courts will have been reinforced by the controversy and criminal proceedings around the arbitration involving Crédit Lyonnais and Bernard Tapie regarding the sale of Adidas.