EPC Wrap and it’s current position in the construction industry                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

2022 saw many challenges in the construction industry, particularly due to inflation and the rising costs of materials, leading to a number of short and long term problems for those on the ground, including a re-evaluation of the way some are choosing, or having, to work.

In this ever changing market developers are finding that contractors are becoming more careful with the contract conditions they are prepared to accept when building out a project.

Currently within the industry, for example, we’re seeing a noticeable decrease in the number of contractors accepting the EPC Wrap approach to working - a traditional approach to adopting large-scale construction projects, with the contractor taking the majority of the risk.  

In contrast, however, many funders still require an EPC Wrap in order to fund a project; all this leaving developers essentially stuck in the middle and unable to move forward with projects.

And, whilst this isn’t the case for all funders and contractors, it is, as we say, noticeable; where, for those contractors willing to accept the risks involved, their estimated cost to adopt the EPC Wrap approach is driven much higher, often quoting an additional 20 to 30% on the construction cost.

This, compounded by current inflation rates, means that the overall cost of a project becomes simply too high to build.

So, we ask: how are funders going to fund projects if there are significantly less contractors willing to build them?