The Public-Private Partnership Law Review: France


In France, public–private partnerships (PPPs) are implemented in many economic sectors (e.g., transport, health, justice, education, urban equipment, environment, energy efficiency, telecommunications and culture) for around €110 billion of activity each year.

In 2018, a decision was made to reshape and modernise the French PPP legal framework as legal rules governing this were scattered throughout about 30 different texts. The PPP Code was finally enacted at the end of 2018 through Ordinance No. 2018-1074, dated 26 November 2018, Decree No. 2018-1075, dated 3 December 2018 and Decree No. 2018-1225, dated 24 December 2018. The new PPP Code entered into force on 1 April 2019.

During 2020 and 2021, the covid-19 pandemic led French authorities to implement both structural and conjectural mechanisms aiming to stabilise PPPs. Ordinance No. 2020-319, dated 25 March 2020, for instance, authorised public parties to extend terms in tendering procedures and contracts for up to four months. This exceptional legislation has been implemented in French law,2 and can henceforth be triggered in the event of similar crisis circumstances.

In this chapter, we will focus on the two main forms of PPP implemented in France: concession agreements and partnership contracts.

The year in review

Despite the ongoing covid-19 crisis, the French PPP market remained dynamic. To revitalise its economy, France launched an exceptional €100 billion recovery plan, France Relance, on 3 September 2020. €40 billion of the €100 billion is coming from the European Union. These sums will be spent over two years and will notably result in tax cuts, investments, research support mechanisms or training for companies. This plan concerns many sectors of activity, including energy renovation, infrastructure, digital, renewables energies and green technologies.

Moreover, in October 2021, France launched a complementary €30 billion investment plan, Plan France 2030. The sums will be spent over a 10-year period, resulting in investments and support mechanisms for several sectors such as nuclear energy, hydrogen, decarbonisation, green vehicles, the food industry and biomedicines.

During 2021, French public local authorities kept up a high level of activity and launched multiple PPP projects in several industry sectors, in particular including the following:

  1. on 5 October 2021, French Armies Ministry awarded a 35-year concession agreement for its military housing worth nearly €3 billion to a consortium including Eiffage SA and Arcade Vyy. The project includes a plan to build more than 3,000 new housing units on 55 sites and to renovate 4,000 units currently managed by other service providers;
  2. on 15 October 2021, the city of Paris has awarded a 20-year cooling network concession agreement worth €2.4 billion to Fraîcheur de Paris, a company jointly owned by Engie (85 per cent) and RATP (15 per cent);
  3. on 18 November 2021, the Provence-Alpes Côte d'Azur region awarded a 10-year concession agreement to operate urban and intercity trains on the Azur worth an estimated €1.5 billion was awarded to SNCF Sud Azur; and
  4. on 11 December 2021, Marianne Laigneau, chair of the board of directors of Enedis, announced the renewal of a 25-year electricity distribution contract worth approximately €7 billion for the Ille-et-Vilaine department.

As for environmental legal requirements applicable to PPPs, Law No. 2021-1104 dated 22 August 2021 introduced several noteworthy measures that will come into effect in 2026:

  1. the grantor will be able to exclude from the award procedure, at the application stage, companies that do not comply with the obligation to draw up a due diligence plan (which must include ecological considerations), except when technical, economic or competitive considerations do not allow it;3 and
  2. the grantor will be required to take environmental considerations into account when establishing technical specifications,4 selection criteria5 and performance conditions.6

Law No. 2021-1109 dated 24 August 2021 also created new rules related to the neutrality of public services applying to public service contracts (including PPPs). In such contracts, the private contracting party now has an obligation to guarantee equality between users and the respect of the principles of secularity and neutrality.

General framework

i Types of public–private partnership

As stated above, there are two types of PPPs that are mainly used in France: concession agreements, which serve to implement major infrastructure projects such as canals, motorways, water distribution systems and toll bridges; and partnership contracts, which can be compared to private finance initiative contracts.

Concession agreements and partnership contracts7 are both administrative contracts under French law, save for narrow exceptions. This distinction is important as the contractual relationship in an administrative contract is different from that in a private contract. The parties are, de facto, unequal insofar as the public person benefits from public authority powers.

A concession agreement is defined as an agreement under which a grantor assigns, for a limited period of time, to one or several economic entities, the performance of works or the management of a service, it being specified that:

  1. a risk linked to the operation of such works or service must be transferred to the economic entity in exchange for the right to operate the said works or service;
  2. a fee in favour of the entity can be added to such operation right; and
  3. the risk transfer to the economic entity necessarily implies a real exposure to the market's fluctuation.8

A partnership contract is an administrative contract under which a grantor entrusts to a private party, for a period set according to the amortisation of investment or agreed financing terms, a comprehensive project relating to the design, construction or conversion, maintenance, operation or management of works, equipment or intangible assets necessary to the public service, as well as to the total or partial financing of the latter. Dismantling and destruction works, and the management of a public service, can also be transferred to the private party under a partnership contract.9

The two main PPPs can be differentiated according to their payment terms: under a partnership contract, the grantor pays a rent to the private partner in exchange for the performance of the mission, while under a concession agreement, the compensation of the concessionaire mainly arises from payments made by users of the service.

ii The authorities

In addition to public authorities (the state, local authorities and their public institutions), private entities (entities specially created to satisfy a non-commercial public interest or formed by several public entities to jointly perform certain activities and public undertakings acting as network operators) are allowed to grant concession agreements and partnership contracts.10

In particular, public health facilities, social security bodies and some public or private entities pursuing a public-interest mission and mainly financed by public funds11 (i.e., public–private joint ventures and state-owned public industrial and commercial institutions) can also do so.

Nevertheless, central administrations other than the state, public health facilities and medical cooperation public structures are, in principle, not able to enter into partnership contracts on their own.12

For partnership contracts executed by the state, the ministries that are involved in the tendering procedure depend on the subject matter of the particular contract. Moreover, approval by the Minister of the Economy and the Budget is required before signature.13

Another important actor in the PPP sector in France is the PPP Support Service (FIN INFRA).14 The FIN INFRA is a dedicated unit within the Ministry of the Economy that assists grantors in the implementation of partnership contracts. The FIN INFRA is primarily responsible for the validation of the preliminary evaluations prepared by grantors before launching a tender. The FIN INFRA also assists and advises public authorities in the preparation and negotiation of partnership contracts as well as any other complex public contracts or public contracts implying an innovative financing scheme.

The FIN INFRA is a major actor given that it also has to issue an opinion about the financial sustainability of each partnership contract.15 This requirement is an efficient way to avoid the financial difficulties deriving from the implementation of some partnership contracts in France.

iii General requirements for PPP contracts

Requirements to be satisfied to resort to a concession agreement or a partnership contract are different.

Concession agreements must include provisions pertaining to the duration of the contract and the tariffs applicable to service users. They may also include provisions relating to sustainable development and social objectives. Moreover, to optimise cost monitoring, the current concession agreement legal regime aims to increase transparency relating to the performance of concession agreements. As a consequence, concession agreements must specify that the concessionaire will be required to provide an annual report to the grantor and that the grantor will have to annually publish essential data pertaining to the concession (i.e., type of investments and applicable tariffs).

Unlike concession agreements, the use of partnership contracts is strictly regulated. First, a preliminary evaluation has to be carried out to evaluate the project's implementation method. Then, a second evaluation must assess the financial sustainability of the project. In light of these evaluations, the grantor must demonstrate that the use of a partnership contract shows better cost-effectiveness than any other type of agreement. Finally the grantor is compelled to submit these evaluations to the FIN INFRA, which is in charge of issuing an opinion on the project's implementation structure.

This preliminary procedure was introduced by Ordinance No. 2015-899 dated 23 July 2015, which concerns public procurement and partnership agreements and aims to simplify the former implementation procedure and answer criticisms raised during the past decade regarding the implementation of partnership contracts.

A partnership contract must include several mandatory provisions, such as the duration of the contract, the conditions for sharing risks between the grantor and its co-contracting party, the performance objectives assigned to the co-contracting party, the payment terms and the consequences of termination of the contract.

Both partnership contracts and concession agreements are thus entered into for a period determined by the depreciation period of the selected investments or financing terms.

Bidding and award procedure

Bidding and awarding procedures for partnership contracts are closely regulated.

The PPP Code provides detailed regulation applicable to bidding and award procedures for concessions of a value greater than or equal to €5.382 million, excluding tax.16 This legal framework applicable for concessions remains flexible, with the aim of ensuring effective and non-discriminatory access for all potential bidders (including small and medium-sized companies).

As regards partnership contracts, three main granting procedures can be implemented:

  1. a competitive dialogue17 in the case of particularly complex projects where grantors are not objectively able to define the technical means or specify the legal or financial aspects of a project;
  2. a negotiated procedure;18 or
  3. a restricted call for tenders.19

We will focus on the rules applicable to the competitive dialogue since it is the most common procedure for the tendering of partnership contracts.

i Expressions of interest

To allow effective competition among applicants (it being specified that applications can be submitted through a consortium), partnership contracts and concession agreements must be the object of adequate publicity.20

Nevertheless, partnership contracts may only be used in the following cases: if the value exceeds €2 million for immaterial assets or if the contract contains specific targets on performance; if the value exceeds €5 million for network infrastructure; or if it exceeds €10 million in other cases.21

Regarding concession agreements, publication requirements are less strict. The public tender notice has to be published in a newspaper authorised to carry legal advertisements and in a specialised newspaper of the relevant economic sector. The notice must also specify the procedures for the applications' submission and the essential characteristics of the concession agreement, including its purpose and nature. Granting authorities may also require the production of documents from the bidders in support of their applications (i.e., the presentation of sufficient professional and financial guarantees to ensure the continuity of the public service).

In both cases, the publication notice must specify the deadline for applications.

ii Requests for proposals and unsolicited proposals

For both partnership contracts and concession agreements, tendering documents are communicated to applicants shortlisted on the basis of their professional and financial capabilities.22

Regarding concession agreements, the grantor must deliver reference documents to the applicant that define the quantitative and qualitative characteristics of the required benefits and, if applicable, the service pricing conditions applicable to the end user.

Regarding partnership contracts, in a competitive dialogue, the grantor has to define the detailed needs and objectives that the project has to meet in a functional programme that is transmitted to the applicants selected for the dialogue.

The possibility of an unsolicited proposal is contemplated neither for concession agreements nor for partnership contracts under the PPP Code.

iii Evaluation and grant

For partnership contracts, a dialogue is conducted with each candidate to define solutions on the basis of the functional programme. The dialogue typically involves two or three phases, which are normally carried out over a period of nine to 12 months.

At the end of the dialogue period, the procuring authority invites the candidates to submit a tender based on the considered solutions. After analysis of the tenders, a partnership contract is awarded to the candidate with the most economically advantageous tender in accordance with the criteria set out in the contract notice or in the tender procedure. The awarding criteria must include the overall cost of the tender and performance objectives defined according to the purpose of the contract.23 As soon as the preferred bidder is selected, the contracting authority must inform the unsuccessful candidates that their tender was rejected. A standstill period of at least 16 days is required between the date of notification of the decision and the date of execution of the contract24 to allow for any eliminated candidate to initiate a summary proceedings challenge on grounds of a breach of the relevant procurement rules.25

For sole partnership contracts to be entered into by the state or entities linked to the state, the FIN INFRA must assess the impact on public finances and the fiscal sustainability of such agreement before its execution.

For all partnership contracts, once they have been signed, the procuring authority is required to send an executed copy of the partnership contract to the FIN INFRA.

At the end of the awarding procedure, a notification must be sent within 30 days to the European Union Official Journal.

Regarding concession agreements, before the negotiation phase, the grantor selects the potential bidders based on their capacities and abilities in accordance with the criteria set out in the publication notice.26 Once they have been selected, applicants have to submit tenders that are freely negotiated with the contracting authority. At the end of these negotiations a concessionaire is chosen and the applicants who have had their offers rejected are notified thereof. A similar standstill period, however, must be respected.27

The contract

i Payment

Concession agreements and partnership contracts can be differentiated according to their payment terms.

Under a concession agreement, the operating risk is transferred to the concessionaire and this transfer necessarily implies a real exposure to the market's fluctuations. As such, the compensation of the concessionaire is linked to the results of such operation. Therefore, the concessionaire's compensation mainly arises from service users.

However, this requirement does not prevent the payment of subsidies by the procuring authority. Given the requirements that could be imposed by the concession agreement, maintaining the financial viability and economic balance of the concession agreement is necessary so that the concessionaire does not apply very high rates to service users. For example, significant financial contributions are paid in concession projects related to railway infrastructure (high-speed railway) or motorways. Local authorities usually subsidise public transport or school catering concessions.

Apart from the revenue collected from service users and subsidies granted by public authorities, the concessionaire may also earn additional revenues (e.g., proceeds from side activities such as advertising and fines).

Unlike concession agreements, partnership contracts are characterised by a regular payment from the grantor to the private partner throughout the term of the contract. This remuneration is determined for the services provided by the private partner (works, intangible investments, supplies and services) and is divided into several parts. One part represents the compensation of the partner for the supply of equipment and the cover costs for servicing the loans contracted to carry out the investment, financing costs, taxes and fees that the partner pays on its investments. The compensation also takes into account the services provided by the private partner. Finally, the compensation of the partner must cover the maintenance costs and expenses for major maintenance and the renewal of certain infrastructure.

The partnership contract must define the terms of the calculation and disbursement of the payment to be made by the grantor. Such payment may be monthly, quarterly or half-yearly.

Under partnership contracts, the compensation is not necessarily fixed as it can take into account:

  1. the completion of performance objectives: the compensation of the private partner may depend on performance targets set in the partnership contract. Premiums or bonuses may be paid (e.g., if the works are completed before the date specified in the contract). Likewise, penalties (e.g., in the case of a delay in completion) may reduce the amount of the rent to be paid by the grantor; and
  2. the collection of ancillary revenues:28 the private partner may develop structures and equipment to benefit from complementary incomes.

Should a partnership contract include the transfer of the management of a public service, the contractor could receive direct payments from service users on behalf of the public authority responsible for this public service. As such, the cash flows of each of the parties have to be expressly distinguished to avoid any confusion with the legal framework applicable to concessions.

ii State guarantees

There are no state guarantees per se issued for PPPs in France.29

Unlike the state, local authorities may guarantee loans subscribed by the project company under a concession agreement or a partnership contract.

Moreover, the contracting authority (including the state) may enter into direct agreements with the private party and its lenders to cover specific issues (cancellation or nullity of the concession agreement or the partnership contract) and preserve the lenders' interests.

iii Distribution of risk

PPPs rely on a clear allocation of the risks between the public and private entities. This allocation of risks is negotiated by the parties and is usually the object of a risk matrix. Except for the risk of use of the works, the risk matrix is fairly similar for concession agreements and partnership contracts.30

Risks relating to the performance of the contract (e.g., delays in the completion and delivery of the works, archaeological discoveries and design risk) are generally transferred to the private entity.

In France, particular attention is given to public authority powers (i.e., powers to unilaterally amend or terminate the contract on public interest grounds) as the contract provisions may define the financial consequences of the use of public authority powers by the grantor.

iv Adjustment and revision

Being long-term agreements, PPPs often include specific clauses for the review of contractual terms, such as tariff-variation clauses, indexation clauses31 and meeting clauses.

Amendments can also be entered into, but only if the overall structure of the contract is not materially altered. Should the grantor be a public authority, the PPP contract can, as a principle, be unilaterally modified by it. The PPP Code establishes such possibility for the public authority to unilaterally amend the contract for reasons of general interest. However, the power of amendment is regulated so that the modification cannot result in a disruption of the overall structure of the contract. Embodying the protection offered by administrative case law, the PPP Code protects the co-contracting party of the administration: the economic balance of the contract must be maintained, and the private co-contracting party must be adequately compensated for the damage suffered.32

Similarly, administrative case law regarding hardship33 has been codified in the PPP Code and is applicable to both concession agreements and partnership contracts. Thus, the private party is entitled to an indemnity to be paid by the grantor when an unforeseen event beyond the control of parties temporarily disrupts the balance of the contract.34

The legal framework applicable to both partnership contracts and concession agreements strictly regulates their amendments by stating six limitative alternative cases under which modifications are acceptable.35

v Ownership of underlying assets

The legal regime applicable to concession agreements where the grantor is a public authority is organised around a classification distinguishing three types of assets:36

  1. assets of compulsory reversion that must revert to the public authority automatically once the contract ends. Because they are crucial to the provision of the public service, these assets are considered, when the contract does not address this issue,37 as the property of the public authority ab initio, that is to say, from the moment the concessionaire acquires an asset or completes specific works. Assets of compulsory reversion must necessarily return free of charge to the public authority at the end of the contract;
  2. assets of optional reversion, which are useful to the provision of the public service but are not necessary to ensure its continuity. The concessionaire is the owner of such assets for the duration of the concession agreement and they only become the property of the public authority if the public authority exercises its recovery right at the end of the concession agreement. The terms of payment of such assets are specified in the contract; and
  3. assets that belong to the concessionaire. They are not subject to being returned to or eventually recovered by the public authority as they do not aim to ensure the continuity of public service.

Regarding partnership contracts, the private partner is the owner of the assets. The private partner sets up a financing that covers the acquisition of assets, the cost of the works and the cost of maintenance and renewal. Consequently, by paying rents to the private partner, the contracting authority pays for the acquisition of proprietary interests in certain assets. At the end of the partnership contract the partner transfers the assets to the contracting authority.

Assets that are not integrated in the financing base (i.e., not acquired by the grantor through the rent) can remain the property of the private partner. However, they may be subject to a contractual provision providing for their transfer against payment to the public authority at the end of the contract.

vi Early termination

The provisions for early terminations are the same for partnership contracts and concession agreements. Specific legal frameworks exist for several types of termination, the main ones being as follows.

Termination on the grounds of general interest

Should the grantor be a public entity, it cannot waive its unilateral right to terminate a public law contract on the grounds of general interest. The quantum of the indemnity owed to the private entity is the highest of all termination cases.

Termination for a public authority's contractual breach

Should the grantor be a public entity, termination for contractual breach by the grantor cannot be a contractual ground under which the concessionaire may require the termination of a concession agreement.

To terminate a concession agreement on the basis of a contractual breach by the grantor, the concessionaire must request such termination before the relevant administrative jurisdiction. The concessionaire would then be entitled to be indemnified in accordance with the principles established by administrative case law, namely to be indemnified in respect of losses suffered, as well as in respect of the loss of profits. Recent case law has confirmed the possibility of including in a contract not related to the performance of the public service a provision allowing the concessionaire to terminate the contract for a contractual breach by the public authority.38 Consequently, certain partnership contracts not related to the performance of the public service could potentially include such contractual provision.

Termination for force majeure

If a force majeure event or an unforeseen event occurs, the contract may be terminated. The contract usually provides that the private entity will be indemnified on the basis of the useful expenses theory developed by the Supreme Administrative Court.39 As it is a jurisprudential theory it is still difficult to determine which costs are deemed to be useful expenses and consequently are to be indemnified. However, financial expenses should be indemnified.40

Termination for a private contracting party's contractual breach

The grantor may also terminate the contract for breach by the private contracting party, as long as such breach is sufficiently severe.41 Such power to terminate the contract exists even when no contractual provisions address it.

When the contract is so terminated, the private contracting party is not entitled to any compensation.42

In addition, the grantor can decide to terminate the contract at the expense and risk of the private contracting party, meaning that the latter will have to bear the additional costs related to the new tendering procedure that the grantor will have to launch to find a new contracting party.

However, doing so requires satisfying two conditions:

  1. the new contract cannot include any new obligations compared to the terminated contract; and
  2. the initial private contracting party must be notified of the new tendering procedure and has a right to monitor its implementation as well as the execution of the new contract to protect its own interests.43


One of the major points of the PPP Code is the enshrinement of the principle of indemnification of financial expenses incurred under the partnership contract or the concession agreement in the case of judicial cancellation following a third-party challenge.

In this situation, private entities can seek indemnification for all expenses incurred in accordance with the concession agreement or the partnership contract, which may include the financial expenses incurred to ensure the performance of the contract, to the extent that the said expenses have been useful to the grantor.44

However, the indemnification of these financial expenses in particular can only apply when a schedule to the contract specifies the main characteristics of financing to be set up for the purposes of the contract performance.

Finally, the PPP Code provides that, if an indemnification clause is provided under the partnership contract or the concession agreement, then it is deemed separable from the rest of the agreements.

From a project finance perspective, the express reference to the theory of useful expenses should be reassuring for both sponsors and lenders.

The indemnification of useful financial expenses constitutes a major achievement for the lenders and all finance parties involved in a partnership or concession project because it covers the risk of third-party challenge, in particular, should a concession agreement or a partnership contract be held to be void as result of a challenge.

In any case of termination, it is preferable to anticipate at a contractual level the financial consequences and terms of payment of owed indemnities resulting from contract termination.

vii Dispute resolution

As administrative contracts under French law, concession agreements and partnership contracts are traditionally subject to the jurisdiction of French administrative courts. Parties are in principle forbidden from entering into arbitration agreements under Article 2060 of the Civil Code, except for international matters.

However, the PPP Code has brought some clarifications in this regard.

In both concession agreements and partnership contracts entered into between private parties only, the parties can submit their dispute to arbitration.45

In addition, public and private parties to a partnership contract (but not to a concession agreement46) are expressly allowed to submit their dispute to arbitration, provided that the governing law is French law.47


In France, PPPs are usually financed under a project finance scheme. The key feature of project financing is that it is an off balance sheet financing for the sponsors.

Project finance generally involves high debt-to-equity ratios depending on the particular project and market. It refers to a limited recourse (or non-recourse) financing structure that does not impose any obligation on the project sponsors to guarantee the repayment of the project debt, should the project revenues not be sufficient to cover the total debt service. Shareholders of the project company are generally only liable up to the extent of their shareholdings.

In respect of the partnership contract, the procuring authority must be informed of any change in the project company shareholding. The partnership contract must contain provisions regarding the procuring of authority information and, as applicable, the proceeds sharing terms in the case of the sale of the project company shares.

The borrowing entity is a project company, namely a special purpose vehicle (with no previous business or record) that will finance, design, build, operate and maintain the project. In France, project companies are often incorporated as limited liability companies or partnerships.

The repayment of the project loans by the project company relies on the future cash flow projected to be generated from the operation of the project (primarily allocated to operating costs and then to debt service).

One of the main concerns of the lenders is to analyse the bankability of the project, which depends on several factors. For instance, the project's cash flow capacity, the mitigation of the risks between all stakeholders, the project company's contractual documentation and the security package must all be examined to ensure the successful financing of a PPP in France.

Many sources of financing are available, including commercial lenders (banks, insurance companies, credit corporations, etc.), sponsors' equity, public bodies, international (multilateral) agencies, bilateral agencies and bondholders. These financiers might be based in France or abroad.

The PPP Code also contemplates the possibility for a procuring authority to contribute to the financing of the project.

State or local authorities or other public bodies, whether acting as procuring authority or not, are now entitled to take a minority stake in the project company. In this case, the project company bylaws must specify the allocation of risk between the shareholders and the measures implemented to prevent any conflict of interest.48

The PPP Code provides that partnership contracts are eligible for subsidies or other financial contributions. The terms and the payment schedule of the subsidies and other financial contributions can be adapted to the duration of the contract.

In respect of financing adjustment, the procuring authority may provide that financing terms referred to in the final tender can be adjusted, provided that this adjustment does not affect the conditions of the bidding procedure by exempting the procuring authority of the obligation to comply with the principle of selecting the most economically advantageous tender or by allowing the prospective candidate to affect the economic balance of its tender.49

In a typical project finance transaction, the lenders provide different types of debt to the project. Senior lenders provide a debt with a right of payment senior to that of the subordinated lenders. Moreover, some lenders might provide a tranche of debt for a specific period of time and with a specific interest rate and an amortisation differing from the tranche provided by other lenders. A wide range of French law debt instruments are also available to issue subordinated, high-yield or convertible bonds.

As project finance is carried out on a limited (or non-recourse) basis, it is critical to secure the finance parties through a collateral security package, which also helps to enhance the bankability of the project and the creditworthiness of the project company in its capacity as borrower.

Under French law, a security interest is generally created in favour of the creditors of the secured obligation.

French law recognises the role of security agents. Pursuant to Article 2488-6 of the Civil Code, a security agent may be in charge of setting up, registering, managing and enforcing any security interest for the benefit of the secured creditors.50 Indeed, security interests are granted in favour of each lender and not only for the benefit of the security agent, which means that each of the lenders might be entitled to act individually in enforcing its specific security interests rights (subject to any restrictions in the financial documentation). The security agent is thus appointed by the creditors and acts under a power of attorney granted by the lenders.

Commonly in PPP project finance transactions in France, security interests may be granted over a wide variety of the project's assets such as bank accounts, securities accounts, the project company's ongoing business (which includes lease rights, logo and corporate name, goodwill, commercial furniture, equipment and machinery used for the operation of business, and certain intellectual property rights attached thereto), equipment, intellectual property rights, receivables (including future receivables, to the extent that they are sufficiently identified) and real estate.

In addition to the above-mentioned security interests, creditors may require the sponsors to provide personal guarantees, notably independent guarantees such as first-demand guarantees and standby letters of credit.

On 15 September 2021, the government issued the French Security Interests Ordinance (Ordinance No. 2021-1192), reforming the French securities laws of and entering into force on 1 January 2022. This was subsequently supplemented by the implementation texts. The main changes pertaining to project finance are the following:

  1. clarification and better efficiency of guarantees;
  2. harmonisation of publicity rules and formalities applicable to the different security interests;
  3. extension of the French guarantee grantor-protective regime to security interests guaranteeing obligations of third parties;
  4. clarification as to the receivable pledge regime;
  5. creation of an ordinary law assignment of receivables by way of security;
  6. creation of a regime for cash collaterals in the French Civil Code;
  7. facilitating the creation of security interests by electronic means (i.e., electronic signature); and
  8. amendments of the rules governing security interests within the framework of insolvency procedures.

At the closing date and before any subsequent disbursement of the loan, lenders will require that the borrower first comply with a set of conditions precedent. These conditions precedent are outlined to ensure that, among other things, prior to any disbursement of funds by the lenders, the project is or continues to be economically and technically feasible and viable, all required permits are and continue to be in place, the project contracts remain valid and enforceable and the adequate security package guaranteeing the lenders' credit exposure is duly in place and enforceable.

Recent decisions

In 2021, a few important rulings were issued by French judges regarding the French PPP legal framework.

In a decision dated 18 May 2021,51 the French Supreme Administrative Court brought clarification regarding public law contracts wrongly terminated by the public party. It decided that when a public law contract is wrongly terminated, the indemnity due to the private contracting party can be lowered in the event of the latter's breaches, even if the breaches were not serious enough to justify the termination of the contract by the public party.

In a decision dated 4 October 2021,52 the French Supreme Administrative Court decided that the interference with the performance of a contract concluded by a public party with a private contracting party, resulting from contractual breaches by a third party under another contract it entered into with the same public party, cannot be deemed as external to the public party, even though the public party did not commit a breach of the other contract, and therefore cannot be raised by the public party to be exempted from the performance of its contractual obligations under the first contract.


2021 was marked by the advent of new social considerations in the PPP legal framework, particularly through the entry into force of laws relating to the environment and to secularism in public services, modifying the first comprehensive PPP Code in France.

Though the ongoing crisis had a significant impact on French PPPs in 2021, the sector seems to have adopted a better apprehension of such events and avoided major impacts.

If the spread of covid-19 throughout the world and in France significantly impacted national PPP activities, in 2020, the sector's dynamism seemed to bounce back with major deals being developed in 2021.

Public authorities also showed a renewed focus on the development of national PPP projects in certain sectors. It is expected that French and European political authorities will keep engaging in strong economic revival policies that could translate into additional public subsidies to the benefit of several PPP projects.

In any case, 2022 will definitely involve critical developments regarding the legal and economic environment of PPP projects that will have to adapt to the new covid-19-related challenges and ordeals.


1 François-Guilhem Vaissier is a partner and Alain Chan Hon, Sacha Ruffié and Lisa Gehin are associates at White & Case.

2 Law No. 2020-1525 dated 7 December 2020 on accelerating and simplifying public action.

3 Article L 3123-7-1 of the PPP Code.

4 Articles L 2111-2 and L 3111-2 of the PPP Code.

5 Article L 3124-5 of the PPP Code.

6 Articles L 2112-2 and L 3114-2 of the PPP Code.

7 Article L 6 of the PPP Code.

8 Article L 1121-1 of the PPP Code.

9 Article L 1112-1 of the PPP Code.

10 Article L 1211-1 of the PPP Code.

11 As mentioned under Article L 1211-1 of the PPP Code.

12 Article L 2211-1 of the PPP Code.

13 See Article R 2223-1 of the PPP Code stating that a partnership contract may be signed by the state or a state public institution only after approval by the Minister of the Economy and Minister of the Budget. In addition, under Article R 2223-2 of the PPP Code, a public body established by the state must obtain the approval of the minister in charge of its supervision. For local authorities, the principle of their free administration exempts them from any requirement for state approval.

14 The FIN INFRA was created by Decree No. 2016-522, dated 27 April 2016.

15 Article L 2212-4 of the PPP Code.

16 Notice relating to the procedural thresholds and the list of central public authorities (JORF No. 0286 dated 9 December 2021).

17 Article L 2124-4 of the PPP Code. The grantor conducts a dialogue with the candidates admitted to the procedure with the aim of developing one or more suitable alternatives capable of meeting the specified requirements.

18 Article L 2124-3 of the PPP Code. The negotiated procedure is defined as the procurement procedure in which 'the contracting authorities consult the economic operators of their choice and negotiate the terms of contract with one or more of them'. The negotiation process enables grantors to negotiate the terms of the contract.

19 Article L 2124-2 of the PPP Code.

20 Articles L 2131-1 and L 3122-1 of the PPP Code.

21 Articles L 2211-5 and R. 2211-1 of the PPP Code.

22 Article L 3123-18 of the PPP Code.

23 Article R 2152-8 of the PPP Code.

24 The duration is either 11 days (when the decision has been electronically transmitted to the rejected bidders) or 16 days.

25 Article L 551-1 of the Administrative Justice Code.

26 Articles R 3123-11 and R 3123-12 of the PPP Code.

27 Article R 3125-2 of the PPP Code.

28 The collection of ancillary revenues serves as a financial incentive for the partner, but also for the public party. Indeed, the rent paid by the public party may be reduced depending on ancillary revenues collected by the partner.

29 However, in early 2009, the state established a guarantee system for priority PPP projects in response to the financial crisis, which was affecting a number of very large PPPs.

30 Under concession agreements, the risk of the works being used by the end user is borne by the concessionaire.

31 These clauses must comply with Articles L 112-1 to L 112-3 of the Monetary and Financial Code that prohibit, with certain exceptions, indices based on overall inflation and requires the use of indices related to the obligations whose price is indexed.

32 Article L 6 of the PPP Code.

33 Supreme Administrative Court, 9 December 1932, No. 89655.

34 Article L 6 of the PPP Code.

35 Articles L 2194-1 and L 3135-1 of the PPP Code.

36 Article L 3132-4 of the PPP Code.

37 The contract may assign (1) ownership of the works to the concessionaire for the duration of the contract, which, although necessary for the operation of public service, are not established as the property of a grantor; or (2) rights on such property (Supreme Administrative Court, 21 December 2012, commune of Douai, No. 342788). At the end of the contract, if assets of compulsory reversion are not fully amortised, the co-contracting party is entitled to a payment equal to the net book value shown on the balance sheet if the depreciation period of the assets involved is less than or equal to the duration of the contract, or the net book value resulting from the depreciation of these assets over the term of the contract when the term of the agreement is less than the normal depreciation period of the assets.

38 Supreme Administrative Court, 8 October 2014, No. 370644. It must be noted that the case law did not concern a concession agreement or a partnership contract but there is a reference to administrative contract; and the termination is not automatic. Indeed, the public authority must have the possibility to contest the termination.

39 Supreme Administrative Court, 19 April 1974, No. 82518.

40 The Supreme Administrative Court has recently held that financial expenses can be considered as useful expenses (Supreme Administrative Court, 7 December 2012, No. 351752). However, it must be specified that in this case, the concession agreement was not terminated on the grounds of force majeure.

41 Articles L 2195-3 and L 3136-3 of the PPP Code.

42 Supreme Administrative Court, 20 January 1988, No. 56503; Supreme Administrative Court, 12 November 2015, No. 387660.

43 Supreme Administrative Court, 10 June 1932, Sieur Bigot, Rec. p. 572.

44 Articles L 2235-1 and L 3136-7 of the PPP Code.

45 Articles L 2197-7 and L 3137-5 of the PPP Code.

46 Article L 3137-4 of the PPP Code.

47 Article L 2236-1 of the PPP Code.

48 Articles L 2213-4 to L 2213-7 of the PPP Code.

49 Article L 2222-1 of the PPP Code.

50 The legal regime applicable to the security agent has been modified by Ordinance No. 2017-748, dated 4 May 2017. However, please note that, according to most French practitioners, this modification establishes an incomplete legal regime and does not address many uncertainties.

51 Supreme Administrative Court, 18 May 2021, Régie des transports métropolitains, No. 442530.

52 Supreme Administrative Court, 4 October 2021, Société sportive professionnelle Olympique de Marseille, No. 440428.

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