The concession creates obligations. The surety bond backs them up.
When the Administration grants a concession, it does not give away a free right: it demands commitments. The concessionaire must guarantee compliance with its obligations throughout the life of the concession, from the start of the works to the final handover of the installations.
Issuance of any sector guarantee
impact on banking capacity or treasury
European countries covered
Guarantees arranged quickly, without affecting your financial strength
Surety bonds allow guarantees to be issued quickly, without affecting your banking capacity or tying up capital. They are accepted by all public authorities as an equivalent to bank guarantees.
A concession is an administrative act by which a public authority grants an individual or company the right to use public assets or manage a public service for a defined period, subject to previously established conditions and obligations.
The key point is that ownership always remains with the State — only the right of use or operation is granted.
Types of Concession
Public Domain Concession
The concessionaire obtains the right to use or operate an asset belonging to the public: a beach, the subsoil, a radio frequency, a body of water.
Public Service Concession
The concessionaire manages a service that falls under public authority responsibility: a toll motorway, a port, an airport, drinking water supply, urban transport. The concessionaire assumes operational risk but acts under the framework and oversight of the public authority.
Transport Infrastructure
PERFORMANCE & REVERSION GUARANTEE
Water Cycle
SERVICE & CONCESSION FEE GUARANTEE
Energy and Renewables
PUBLIC DOMAIN GUARANTEE
Ports and Coastal Areas
DEMANIAL USE GUARANTEE
Urban Concessions
CONCESSION FEE & WORKS GUARANTEE
Telecommunications
DEPLOYMENT / ROLLOUT GUARANTEE
Reversion and Decommissioning: two distinct obligations
At the end of every concession, a final obligation arises towards the public authority. However, it is not always the same: depending on the type of concession and the terms set out in the tender specifications, the concessionaire must either hand over what has been built, remove it entirely, or both.
Reversion Guarantee
- The installations are handed over to the public authority in full working condition and ready for use.
- The concessionaire covers the costs of maintenance and final preparation prior to handover.
- The infrastructure continues in service under public ownership.
Decommissioning Guarantee
- The installations are removed, demolished or eliminated entirely.
- The concessionaire assumes the costs of demolition, waste removal and land restoration.
- The site is left clear and in a condition equivalent to its original state.
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Which sectors use Surety Bonds?
Surety bonds are multi-sector instruments that can be used across all industries.
It is an alternative to the bank guarantee, offering greater advantages and enhanced flexibility.These are the sectors we commonly work with
Administrative Concessions
Guarantees for the management of long-term administrative concessions of public services.
Renewable Energy
Grid connection bonds and decommissioning guarantees for any renewable energy installation.
Mining
Environmental restoration, waste, exploitation and concession guarantees for mining operations.
Environment
Environmental restoration guarantees required by law.
Construction & Real Estate
Buyer deposit guarantees and decennial insurance.
Private Security
Guarantees required by national competent authorities without affecting banking exposure.
Customs & Import/Export
Guarantees on payment of tariffs and VAT before the Customs and Special Taxes Department.
Gambling
Administrative bonds for gaming licences.
Advantages: Surety bond
Your liquidity, intact
No financial resources are tied up. The money stays in your account doing what it should: financing your business.
Off the Bank Risk Report
The surety bond does not count as bank risk. Your rating and your financing capacity are not affected.
Response in 48-72h
We operate in 30 countries. A single signature for all your markets. We do not miss deadlines. When the specifications require 5 days, we deliver in 3. Study, response and issuance.
Coverage in 30 countries
A single relationship with Sammy Free covers you in any country of the European Economic Area. Without looking for a local broker every time.
Specialists, not generalists
We only do surety bonds. Not car insurance, not life, not home. Only surety bonds. This focus makes the difference.
Plafond: issue without waiting
With your pre-approved line you can issue new guarantees in a matter of hours. One analysis a year, unlimited tenders.
What documentation is required to apply for a surety bond?
The documentation required varies depending on the insurer and the type of operation, but generally includes information on the company’s financial, fiscal and legal situation, together with documentation related to the contract or tender (specifications, award notice, etc.).
How Much Does a Surety Bond Cost?
The cost of a surety bond depends on several factors that determine the level of risk involved:
- The company’s financial strength
- The type of bond required (bid bond, performance bond, advance payment bond, etc.)
- The amount and duration of the bond
- The company’s track record
- The country where the bond will be issued
- The company’s technical and operational capacity
- Market conditions
If you would like to learn more, read our article on the factors that influence surety bond pricing.
Can a surety bond replace a bank guarantee?
Yes. Both surety bonds and bank guarantees are valid instruments for securing a contract, and either can be used.
The key difference lies in the financial impact on your business:
- Bank guarantee: uses part of your banking capacity and ties up liquidity or assets as collateral.
- Surety bond: does not affect your banking capacity and does not tie up capital.
Discover all the advantages of surety bonds compared with traditional bank guarantees.
How long does it take to issue a surety bond?
It depends on whether you already have a Plafond (pre-approved bonding facility) in place with the insurer or not:
- With a Plafond line: issuance is same-day, as the company has already been assessed and approved.
- Without a Plafond line: the required documentation must be submitted (financial statements, legal documentation, tender documents, etc.). Once received, you will normally receive a quotation within 48 hours.
Do you also arrange guarantees between private companies?
Yes. Surety bonds can be used both in contracts required by public authorities and in agreements between private companies.
- With public authorities: they are required by law to accept a surety bond as a valid form of guarantee, unless the tender documents state otherwise.
- Between private companies: both parties must agree on the type of guarantee accepted. Both a surety bond and a bank guarantee are acceptable where there is mutual agreement.
What types of guarantees do you arrange?
We arrange all types of surety bonds. The most common are:
- Bid Bond: to participate in public tenders and procurement processes.
- Performance Bond: to guarantee performance of the contract once awarded.
- Advance Payment Bond: when a company receives an advance payment and must guarantee its repayment if contractual obligations are not met.
- Maintenance Bond: provides cover during a defined period after completion, ensuring that the works have been carried out correctly and covering potential defects in materials, workmanship or design that may arise at a later stage.
- Retention Bond: replaces amounts retained by the contracting authority until completion of the contract. It avoids the retention of funds from certified interim payments due to potential defects.
If your situation does not fit exactly into any of these categories, contact us with no obligation and we will find the most suitable solution for you.