Last Updated October 08, 2019

Law and Practice

Authors



Winston & Strawn London LLP provides a wide range of legal services through its banking and finance practice, to public and private companies, leading financial institutions, multilateral and development finance institutions, private equity and investment funds, alternative funding sources, investors and emerging companies, on investment grade, leveraged and mezzanine financings. The firm advises on high-profile transactions and matters ranging from cross-border transactions, initial public offerings (IPOs) and project finance matters, to distressed acquisitions and creative “first-of-their-kind” financings. Clients include leading international funding sources which provide senior, subordinated, secured and unsecured debt, and hybrid (equity/debt) products, as well as institutional investors who regularly participate in senior debt markets, equity sponsors, and borrowers in both developed and emerging economies. Additional thanks to partners Ed Denny and Dan Meagher and associate Shaheer Momeni, among others, for their contributions to this chapter.

Project finance has been used to finance large capital-intensive energy and infrastructure projects in the UK since the 1970s. Project finance entails the raising of finance on a non – or limited – recourse basis by a special purpose vehicle (Project Company), with all repayments payable from the cash-flows generated by the project.

A typical project financing structure includes one or more equity investors as owner(s) of the Project Company and lenders (usually composed of a consortium of financiers, including commercial banks and, often, multilateral agencies or development finance institutions). In the wake of the financial crisis, continuing pressure on commercial banks’ liquidity and the tightening of regulatory requirements under the Basel III rules saw many banks reduce or cease their involvement in project financing transactions. In recent years, institutional investors have increasingly contributed to closing the financing gap in UK infrastructure projects.

Project finance in the UK is not subject to a specific legal framework and the applicable rules will often depend on the sector and location of the relevant project. In addition to UK legislation (ie laws of England and Wales, Scotland and Northern Ireland), the applicability of European law must be taken into consideration when structuring and procuring projects. Relevant European law provisions include the state aid rules under articles 107 and 108 of the Treaty on the Functioning of the European Union (State Aid Rules) and various EU environmental regulations. In addition, the planning and licensing regimes in the UK are also a prime consideration in project financing transactions.

Winston & Strawn London LLP

1 Ropemaker St
London
EC2Y 9AW

020 7011 8700

+44 20 7011 8800

JeRobertson@winston.com www.winston.com
Author Business Card

Authors



Winston & Strawn London LLP provides a wide range of legal services through its banking and finance practice, to public and private companies, leading financial institutions, multilateral and development finance institutions, private equity and investment funds, alternative funding sources, investors and emerging companies, on investment grade, leveraged and mezzanine financings. The firm advises on high-profile transactions and matters ranging from cross-border transactions, initial public offerings (IPOs) and project finance matters, to distressed acquisitions and creative “first-of-their-kind” financings. Clients include leading international funding sources which provide senior, subordinated, secured and unsecured debt, and hybrid (equity/debt) products, as well as institutional investors who regularly participate in senior debt markets, equity sponsors, and borrowers in both developed and emerging economies. Additional thanks to partners Ed Denny and Dan Meagher and associate Shaheer Momeni, among others, for their contributions to this chapter.

{{searchBoxHeader}}

Select Topic(s)

loading ...
{{topic.title}}

Please select at least one chapter and one topic to use the compare functionality.