ABSTRACT
The use of private finance to fund the development of large infrastructure projects has increased the focus of the contracting parties (government and private sector investors) to the management of environmental risks. This is an improvement from the former situation when the majority of infrastructure projects were financed from the public budget. It was the case then that the government simply assumed the environmental risks and passed them down to the citizens in the form of higher remedial costs or in the worst cases, in the form of a degraded environment. Therefore, it appears to be the case that the adversarial and collaborative nature of contract negotiations between the public and private sector actors ensure the better management of environmental risks in privately financed infrastructure (P.F.I.) projects. This chapter compares the management of environmental risks under government-funded infrastructure projects with the situation under P.F.I. projects in Nigeria. It also analyzes some of the legal strategies and contract clauses employed by the parties in P.F.I. projects to identify, price, allocate, and mitigate environmental risks during negotiations.
