Banking & Finance 2025 Comparisons

Norway, in 2025, has continued its largely steady economic trajectory, though some fluctuations have occurred since the previous year. The Norwegian Central Bank retained its policy rate at 4.5% for 2024, then reduced it slightly in early 2025 in response to the level of inflation and international market pressures. At the time of writing, the policy rate is around 4.25%, with another determination scheduled for late summer.

From a regulatory perspective, Norway has made further strides in implementing EU financial regulations during 2024–2025, most notably by implementing the EU’s revised Capital Requirements Regulation (CRR III) from 1 April 2025 and the EU’s Securitisation Regulation from 1 August 2025. The revised Capital Requirements Directive (CRD VI) is expected to be implemented in 2026.

The global impacts of wars, in particular in Ukraine and Gaza (including elsewhere in the Middle East), other geopolitical tensions, and energy shortages in 2023 and 2024 have carried over into 2025. This environment sustains an appetite for offshore and oil services financing in Norway and elsewhere in Europe. While some Nordic banks remain wary, Norwegian and European lenders continue to see opportunity. Meanwhile, financing for LNG and renewable energy remains solid, driven both by lingering energy security concerns and a growing push for cleaner energy alternatives.

The Norwegian bond market remains strong, with continued high activity and growing volumes for both the Corporate IG bond market and the Corporate HY bond market, and 2024 setting a record for new issue volumes. The high activity has continued in 2025. The authors have seen a steady flow of new issuances, refinancings and extensions. However, ESG-driven deals in the Norwegian market have not regained the momentum seen in recent years, amid continuing macro uncertainties and geopolitical risk, which have again directed attention toward energy, shipping, and offshore.

A notable trend is that the issue sizes continue to increase. Further, more and more non-Nordic issuers turn to the Norwegian bond market for capital – there are now more non-Nordic issuers than Nordic issuers in the Norwegian Corporate high-yield (HY) bond market.

It is expected that the Norwegian bond market will remain strong for the rest of 2025.

Direct lending continues to be a true competitor to the banks. There is naturally limited transparency on statistics within this market in Norway, but based on the authors’ observations from transactions, there seems to be substantial growth, which is expected to continue in the years to come. This is both on a bond format through the templates of the Nordic Trustee and on a more direct and bilateral basis. The format depends both on investor or lender preference and Norwegian regulatory issues, which restrict lending from non-regulated entities (with exceptions as described in 2.1 Providing Financing to a Company and 3. Structuring and Documentation).

Historically, much of the high-volume leveraged or non-investment grade lending in the Norwegian market has been made within capital intensive, asset-backed industry sectors such as shipping and offshore services. Such lending has entailed the financing of expensive assets, which require a capital-efficient structure. A common structure in recent years has been based on the LMA standard super senior bank and senior secured bond, where in some instances the bank tranche has ranked pari passu with the bond tranche. BAHR acted as Norwegian lead counsel to the lenders on the first bank/TLB facilities combined with Norwegian bonds, under a common terms agreement. The authors expect appetite to grow for more of these creative and bespoke financing structures in the years to come, where the Norwegian bond market complements other capital markets.

The introduction of EU-harmonised securitisation rules paves the way for risk-sharing transactions where investors may co-invest with banks in individual credits or pools of credits. The authors expect this market to grow in Norway over the coming years.

Preferred equity is used extensively, particularly in private equity transactions or in connection with more structured credit. For example, this can be used where several investors are participating in a project but one of the creditors has a regulatory requirement to structure its investment differently from the others. In work-out situations or outright restructurings, issuance of new subordinated capital has often been used instead of equity instruments in order to create a layered capital structure. This may include zero coupon bonds with interest payments akin to that of dividend distributions. Hybrid debt instruments with perpetual tenor have also been used in some instances, to create debt instruments which, for accounting purposes, can count as equity in the balance sheet.

Although green and sustainability-linked features remain frequently used, their popularity has not bounced back to 2021–2022 highs.

Norway’s ESG-linked and sustainability loan market, which had flourished for numerous years, still accounts for a meaningful slice (roughly 25–30%) of new corporate loans in early 2025. Many lenders continue to insist on ESG or sustainability components as part of borrowers’ “licence to operate”, but margin benefits appear limited, and some companies find that the compliance burden outweighs cost savings. Nonetheless, regulators (including the Norwegian Financial Supervisory Authority) have hinted at tougher disclosure requirements, potentially bringing further impetus for ESG financing structures in late 2025 or 2026. Projects in real estate and maritime/aquaculture remain prime sectors for these lending solutions

The Norwegian legal market closely follows the development in the UK and in Europe with regards to format, with Norwegian banks adopting the sustainability-link rider wording developed by the LMA. Norwegian banks are also developing their own frameworks based on LMA principles, such as green loans where a certain percentage of revenue stems from a “green” activity, service or product. Examples include real estate and aquaculture.

With the growth of large-scale infrastructure projects in Norway fuelled by energy transition and emergence of new and capital-intensive industries, project financing is set to play a key role going forward.

The provision of financing (including loans and guarantees) is a regulated activity in Norway, and lenders looking to provide financing to Norwegian companies will, as a starting point, need to be licensed or passported as either an EEA-based credit institution under Directive 2013/36/EU (CRD IV) or a European long-term investment fund under Regulation (EU) 2015/760 (ELTIF). However, loans provided entirely on a Norwegian borrower’s initiative, without the relevant lender having marketed or recommended the loan to the borrower prior to the borrower’s decision to initiate the transaction, may constitute reverse solicitation and not trigger licensing requirements in Norway pursuant to the practice and guidelines from the Norwegian regulator. The scope of the reverse solicitation exemption would be subject to a case-by-case analysis. In addition, from 1 August 2025, the EU Securitisation Regulation applies in Norway and as a result financing provided in Norway by a securitisation SPV in the context of a securitisation is not licensable.

Other than the licensing requirements mentioned in 2.1 Providing Financing to a Company, there are no particular restrictions on foreign lenders as opposed to domestic lenders.

Without prejudice to the licensing requirements for lending activities, there are no restrictions preventing foreign lenders from receiving security or guarantees.

Under Norwegian law, there are no foreign currency exchange controls or limits, and there are no restrictions regarding payments or repayments to or from a Norwegian borrower in a foreign currency.

In general, there are no restrictions on a borrower’s use of proceeds from loans or debt securities under Norwegian law. See, however, 5.4 Restrictions on the Target regarding the limitations applicable to a Norwegian target company, which relate to supporting an acquirer of a Norwegian target company when it comes to acquisition financing for the purchase of the shares in the Norwegian target company. The same limitations will apply, for example, with respect to a Norwegian target company obtaining a loan and on-lending these funds to the acquiring entity for the purpose of the acquiring entity paying down its acquisition debt (debt pushdown exercises).

Norwegian law does not have the concept of “trust” as known in common law or English law, but Norwegian law has a well-established agency concept whereby one entity holds a security interest on behalf of itself and others. With respect to secured financings governed by Norwegian law, a security agent will be appointed by the finance parties to hold the transaction security on their behalf.

Loan agreements governed by Norwegian law generally contain LMA-style provisions facilitating transfers of debt, whereby the transferor agrees to transfer, and the transferee agrees to assume, the debt participation of the transferor. Syndicate lenders usually appoint a security agent to hold and administer the security on their behalf. New lenders will therefore not be required to take any additional steps to obtain the benefit of the associated security. Also, under Norwegian law, the default rule is that the security interest will follow the secured debt, without any further requirements to ensure the continuing effectiveness of the security. This means for example that a syndicate member may sell or otherwise transfer its holding in a syndicated loan, without having to take any further action or formality in order to make sure that transferred loan will retain its benefit from the security interest.

Loan agreements may contain provisions which restrict debt buyback, but in the absence of regulation there are no general restrictions preventing debt buyback transactions. General equal treatment provisions may be applicable if the debt buyback relates to traded debt securities.

In private acquisitions, and in voluntary public offers on the Oslo Stock Exchange, it is customary to use the “certain funds” provisions, inspired by the UK Takeover Code, included in an LMA-based facilities agreement. This is in order to provide the seller with the necessary comfort in relation to funds being available to settle the purchase price on closing. In public takeover situations, where a mandatory offer is made on a company listed on the Oslo Stock Exchange, the offeror will need to evidence that a bank or financial institution, which has permission to provide financial services in Norway, has guaranteed settlement of the purchase price.

The EU Securitisation Regulation (as amended) was implemented in Norwegian law with effect from 1 August 2025, together with related changes in the CRR and Solvency II regulations for banks and insurers respectively.

The implementation of EU’s securitisation rules in Norway present new opportunities for lending and investing in Norwegian credits, both in the form of cash securitisations where loans are sold and converted into tranched securities and in the form of synthetic (“on balance sheet”) securitisations in which banks share the credit risk of certain parts of their loan book with external investors in bespoke risk-sharing/co-investment transactions.

Due to Norway’s relatively strict capital requirements for Norwegian banks and credit exposures in Norway, it is expected that several banks and other financing companies will look into the potential for securitising Norwegian loan portfolios going forward.

Norway has rules whereby loan terms which are unreasonable as compared to the service provided can be void and not binding on the borrower. However, the rule has had a limited application in practice, and it would normally not come into play in agreements with a professional credit provider. The agreement is generally meant as a safety net and follows from the general contractual principles of Norwegian law relating to non-enforceability of unreasonable contract terms. Applicability of this rule is determined on a case-by-case basis, and there is, for example, no specific interest rate which is the maximum permitted rate under law to refinance the credit card debt.

For companies with financial instruments admitted to trading on Oslo Børs, Euronext Expand and Euronext Growth, financial contracts must be publicly disclosed if they constitute inside information pursuant to the EU Market Abuse Regulation. Furthermore, companies with financial instruments admitted to trading on Oslo Børs and Euronext Expand must publicly disclose the issuance of new loans, including any related guarantees or collateral, pursuant to the rules of the Oslo Stock Exchange, regardless of whether this constitutes inside information.

Payments of interest by a Norwegian borrower may be subject to withholding taxes if made to the borrower’s related parties located in low tax jurisdictions. The purpose of the rule is to prevent profit shifting out of Norway which erodes the basis for the Norwegian tax regime. The withholding obligation also applies to some lease payments (thereby ensuring that for capital assets, it is not possible to circumvent the rules by leasing the asset into Norway from a low tax jurisdiction). However, no withholding tax on interest will apply to interest payments made to lenders which are not related parties of the borrower.

In general, Norway is a creditor-friendly jurisdiction when it comes to costs. The withholding tax legislation would not apply to ordinary, third-party lenders and the costs of obtaining security in Norway are limited to nominal registration fees. There are no stamp fees or duties for lenders which are calculated based on the loan amount or the value of the underlying asset.

Such concerns are not relevant in Norway, as the tax rules and withholding tax issues are minimal (as discussed in 4.1 Withholding Tax and 4.2 Other Taxes, Duties, Charges or Tax Considerations). Further, FATCA issues are solved by way of information exchange agreements between Norwegian and US authorities. However, the strict regulatory requirement for lending into Norway limits the role of smaller banks in the Norwegian market (since these banks can at the outset not provide financing into Norway, unless an exception from the licensing requirements can be relied upon).

A security package typically consists of:

• a mortgage over any real registered asset being financed, such as real estate, ship, rig, aircraft;
• floating charges over trade receivables, inventory and operating assets;
• a charge over shares in obligors or other relevant companies;
• assignments of intra-group loans, insurances and earnings; and
• charge over bank accounts.

The costs of registering security in Norwegian registries are nominal.

Registrable assets are charged by way of a mortgage form, which is registered against the asset in the relevant registry, such as a vessel registered in the Norwegian ship registry.

Floating charges over trade receivables, inventory and operating assets are established by executing a designated charge form which will then need to be registered against the relevant company in the Norwegian Registry of Movable Property. Registration normally takes one to two weeks.

Charges over shares are established by written agreement between the security agent and the shareholder, and (for a private limited company) perfection is established through notice to that company. An updated shareholder registry evidencing the share charge is normally delivered to evidence the share charge and the priority.

Assignments of earnings and receivables, such as insurance proceeds, are created by written agreement where the act of perfection is notice to debtor.

All-asset floating charges are not permitted under Norwegian law. A similar effect can be achieved, however, through the establishment of asset-specific floating charges over inventory, machinery and receivables, combined with fixed charges over shares, monetary claims and more.

A Norwegian company may guarantee the debt of its shareholder or another company in the same group of companies as the Norwegian company, provided that the guarantee economically benefits at least one company within its corporate group. This practical exception means that guarantees are common in Norwegian law financings. However, each Norwegian company, in practice through its board of directors, has an obligation to act in the best interests of the company and ensure there is sufficient corporate benefit.

A Norwegian target company (and its subsidiaries) may grant security and give a guarantee for the acquisition debt if the company acquiring the shares (buyer) is incorporated in an EEA jurisdiction and will control the target company following the acquisition. A certain whitewash procedure must be complied with prior to the security and/or guarantee being granted, which consists of (among other things):

• the board of directors of the target considering the creditworthiness of the beneficiary;
• approval of the financial assistance by the board of directors;
• a declaration by the board of directors that it will be in the interest of the company to grant the security and guarantee and an assessment of the consequences of the financial assistance on the company’s equity and solidity; and
• approval by the shareholders of the target (usually by way of shareholder meeting) – the package of documents must be filed with the Norwegian Registry of Business Enterprises before the security and guarantee may be granted.

The relevant company must also, in line with granting guarantees and security generally, assess corporate benefit based on the specific facts and situation. Financial assistance for acquisition debt may not be granted if the board of directors concludes that it will not be in the interest of the company and/or that the requirement relating to adequate equity and solidity will not be satisfied.

A resolution of the board of directors of the relevant company is normally the only consent required to approve a company’s granting of security or guarantees. Shareholder resolutions may be required if provided for in the company’s articles of association or in acquisition financing scenarios.

Registrable security (such as a mortgage over a vessel and registrable security with the Norwegian Registry of Movable Property) is released through the mortgagee or chargee submitting the original charge form, endorsed with “for deletion” and signed by an authorised signatory of the existing beneficiary (alternatively under a power of attorney). For security perfected through notice to a third party (eg, account banks, debtors and insurance agents, etc), the security is released by sending a notice of release or discharge to such third party.

The starting point for priority is that a charge receives priority from the time it obtains legal protection or perfection, so that of competing security is determined based on time of priority (“first in time, best in right”). However, there are significant exceptions. Preferential claims may also affect priority, although many preferential claims will apply only in the event of insolvency proceedings (including reconstruction proceedings).

Subordination is a recognised concept under Norwegian law, both contractual and structural, and contractual subordination of claims between creditor groups is standard. The consequences of subordination are not clear cut in all cases, however. For instance, the release mechanism for subordinated claims that may typically be seen in standard LMA intercreditor agreements is untested under Norwegian law. It is believed that subordination under Norwegian law at least extends to turn-over provisions. Whilst in effect this will have the same end result, there is no mentioning of release in the preparatory works to the Norwegian insolvency legislation.

Equitable subordination does not have an equivalent under Norwegian law.

Under Norwegian law there are a limited number of security interests arising by operation of law which will prime a lender’s security interest. It is not normally possible to structure around such security interests, apart from the mitigating factors mentioned below.

The bankruptcy estate of a party (a “Bankrupt Party”) which has encumbered an asset as security for obligations owed, has a statutory lien over any such encumbered asset as well as over assets which a third party has encumbered, as security for the obligations of the Bankrupt Party. An exception applies for assets which are charged as security in accordance with the Norwegian Financial Collateral Act (which implements the Financial Collateral Directive). The statutory lien has priority over all other liens and security interests in the relevant asset, regardless of whether such other liens or security interests have been created voluntarily or involuntarily. However, it is limited to 5% of the value of sales proceeds up to a maximum amount equal to 700 times the court fee at any time (which at present means a maximum amount of NOK919,800) in respect of a mortgage of real property or vessels. Proceeds from the statutory lien (if any) received by the bankruptcy estate may only be applied towards its necessary expenses.

Also, pursuant to the Norwegian Reconstruction Act, a company undergoing reconstruction pursuant to that Act may raise financing for its operations during the reconstruction phase (including for costs related to the reconstruction). Such financing and costs related to the reconstruction will enjoy a statutory lien over the assets of the company undergoing reconstruction and the rules, as set out above in respect of statutory liens for bankruptcy estates, will otherwise be applicable. Assets secured pursuant to the Financial Collateral Act are excluded, however. In addition, the financing and costs related to the reconstruction may be granted a lien over machinery and plant (driftstilbehør), inventory (varelager) and trade receivables (utestående fordringer) of the company with priority over all other liens or security interests in the relevant asset. The debtor must prove that such secured loan is needed, and security may only be granted with the consent of the restructuring committee. Affected holders of security rights may petition the court for the reconstruction committee’s consent to be reversed. The court may reverse the consent if the position of the existing security rights is significantly impaired, or if the court finds that there is not a sufficient need for the loan.

Finally, maritime liens will also prime a mortgage over a vessel. Maritime liens will be statutorily preferred, even if the obligation giving rise to the maritime lien arose after perfection of the vessel mortgage.

The enforcement route under Norwegian law varies based on the asset type.

The Enforcement Act sets out the mandatory provisions for the individual enforcement of security interests over assets such as real estate, vessels, aircrafts and operating assets. Agreements made pre-enforcement which stipulate alternative enforcement procedures and relate to non-financial collateral (see below) are prohibited, including private repossession or any kind of self-help remedy. However, following an enforcement situation, the security agent and the security provider may agree on alternative enforcement procedures. The main enforcement measures are forced sale through a third party appointed by the court or by public auction.

In order to enforce a claim, the claimant must have sufficient legal grounds for enforcement and perfected (registered) security would in practice constitute grounds for enforcement. Additionally, the following conditions must be met:

• the relevant claim must be due, payable and in default;
• the claimant must be entitled to file the petition for enforcement and the claim must be directed at the security provider; and
• in relation to perfected security, a written notice must have been served on the security provider two weeks prior to filing a petition for enforcement.

However, the provisions of the Enforcement Act do not apply to security established in accordance with the Financial Collateral Act over assets which may be charged as financial collateral, including security over financial instruments (including shares) and bank deposits. Instead, security interests over financial collateral may be enforced through such enforcement procedures and in such manner as agreed upon by the parties in the relevant security document, which may include forced sale, appropriation and transfer of the relevant asset(s) by the security agent. Further, security established under the Financial Collateral Act may be enforced notwithstanding the opening of reconstruction or bankruptcy proceedings against the security provider. In light of the foregoing, security created over financial collateral is effective security. However, both the enforcement and valuation of financial collateral in connection thereto need to be made on the basis of “commercially reasonable terms”.

A Norwegian company may enter into contracts governed by foreign law, and subject to foreign jurisdiction, with the exception that it will usually not be able to circumvent statutory provisions of Norwegian law by choosing foreign law as the governing law.

The courts of Norway will enforce final and conclusive judgments of states party to the Lugano Convention of 2007 and/or obtained in any UK jurisdiction (subject to the terms of the convention of 12 June 1961 between the United Kingdom and Norway providing for the reciprocal recognition and enforcement of judgments in civil matters). A judgment of a foreign court or tribunal of a state not party to the Lugano Convention can be directly enforceable in Norway subject to fulfilling certain requirements.

Lending is a strictly regulated activity in Norway as previously noted. However, even if a loan was granted in breach of Norwegian licensing rules, the loan agreement and appurtenant security agreements would not on this basis alone be rendered void and unenforceable. Limitation on enforcement of security could apply to the extent that the acquisition of the secured asset is subject to a licensing requirement, such as the acquisition of qualifying holdings in regulated institutions or assets subject to Norwegian national security/FDI legislation.

The rights of a secured creditor must be respected in both individual and joint enforcement, however, bankruptcy proceedings will generally limit the secured party’s participation in the joint proceedings, as they will be led by a liquidator appointed by the court. An automatic stay of up to six months may apply before the security is enforced on an individual basis. Exceptions apply, however, including in respect of security granted under the Financial Collateral Act as described in 6.1 Enforcement of Collateral by Secured Lenders.

The rules for payment of dividends to (unsecured) creditors in an insolvency are complex and follow from mandatory provisions of law. Generally, the waterfall can be described as follows:

• costs incurred as a result of the bankruptcy or by the bankruptcy estate during the insolvency proceedings;
• various salary claims incurred prior to opening of bankruptcy;
• taxes, VAT, etc; and
• various subordinated claims (and agreed subordinated claims).

Secured creditors are allowed to claim as unsecured creditors for the part of their initially secured claim which was not covered by enforcement of the security.

This will vary depending on the complexity of the bankruptcy estate. As a general rule, all assets which are secured in favour of lenders will usually be released by the bankruptcy estate and made available to the secured creditors quickly after opening of bankruptcy.

A company that has or will have in the foreseeable future, serious financial difficulties may file for reconstruction under the Reconstruction Act. The Reconstruction Act introduces a more flexible legal framework for continued business operations in close co-operation with the creditors and has since its adoption in 2020 been utilised with success on high-profile complex matters.

Debt negotiations can be entered into by the debtor without involving the courts. Unless a secured creditor has expressly agreed not to enforce or take ownership of the collateral, the secured creditor is not affected by these negotiations. Court-administered debt negotiation proceedings can only be initiated by a willing debtor. This debtor must demonstrate that they are unable to meet their payment obligations as they fall due and that it is not unlikely that the debtor will obtain a composition with their creditors.

There is a clear distinction under Norwegian law between secured and unsecured creditors. A secured creditor would normally get access to its security asset from the bankruptcy estate manager quickly during the bankruptcy process. There is a good chance of recovery for a secured creditor if the value of the assets has upheld well, taking into account that there usually would be some costs incurred in connection with realising the security asset. Unsecured creditors would be paid out after creditors which are mandatorily preferred by law, and the chances of recovery are usually very low. A typical payment to an unsecured creditor would normally be a small percentage of the face value of the claim. On this basis, typically unsecured creditors try to negotiate with a borrower in financial difficulty a solution whereby they can obtain security for their claim. As secured creditors have a much better standing in the bankruptcy, such transactions where new security is granted for old debt are susceptible to be set aside by the bankruptcy estate if they have been undertaken within a certain time frame before bankruptcy was opened.

Project financing in Norway has been used extensively in asset-based financings, such as within real estate or shipping and offshore. It has, to a certain extent, also been used for financing other types of projects with an agreed cash flow, such as renewable energy projects (particularly related to onshore wind projects) and to some extent public communication and infrastructure through public–private partnership (PPP) transactions.

With the energy transition and the emergence of new capital-intensive industries this is about to change. In the years to come, project financing is set to play a key role as source of capital for financing the energy transition, and Norway is no exception in that regard.

Offshore wind is a prime example. Norway has major ambitions within offshore wind with a stated goal to award areas having the potential to produce 30 GW by 2040. In 2024, Norway’s first large scale offshore wind project, the Sørlige Nordsjø II 1,500 MW project, were awarded through a competitive auction to Ventyr, a joint venture between Parkwind and INGKA. Ventyr entered into Norway’s first contract for difference (CfD) with the Ministry of Energy.

PPPs have been used to some extent in Norway, although somewhat on and off, which is mostly due to different governments having diverging political opinions on the benefit of using private capital to deliver public services. For many years, PPPs have been used to finance various selected construction projects for new roads and bridges in particular. Although the trend is increasing, the pace has been somewhat slower than in other jurisdictions where this has been a more sought-after source of financing. In Norway, the object of a PPP has often been more to see if a private solution could reduce costs of construction as compared to a fully governmentally managed project, as opposed to providing access to financing. Under the current political landscape there is also a trend towards a decreased level of private services, for example in relation to healthcare and nursery homes. Although not strictly a PPP, there was a trend for some years whereby public authorities and municipalities sold public infrastructure and buildings to private investors, which either leased the assets back or sold the relevant service back to the vendor. Although now in reverse, the authors believe that this trend may come back at some point in time.

There are a variety of public regulations and requirements associated with governmental activity in Norway, so any significant transaction with any governmental authority or a company which is wholly owned by such needs to be carefully assessed. Any breach of, for example public procurement legislation, may be challenged by competing interests.

In relation to the new offshore wind projects, the Norwegian ministry responsible for granting offshore wind licences is considering imposing a condition that the licensed offshore wind activities must be governed by Norwegian law contracts. There is no direct suggestion that such requirement would extend to the financing of the relevant project.

At the outset, there are no foreign ownership restrictions on real estate, provided that there are no implications with regard to sanctions, or the ownership is not related to certain regulated industries, which are regarded as critical to Norwegian natural resources (or strategic interests). This could, for example, relate to ownership of real property over land-based seafood, which requires a concession from the authorities. Please also note that there are ownership restriction rules applicable (both to Norwegian and non-Norwegian owners) in certain other industries related to resources of the ground or from the seabed, such as for hydropower plants. As a general rule, however, obtaining security would require a licence from the relevant authorities upfront. Whilst a security interest would not automatically be set aside, the relevant requirements would have to be taken into account when enforcing the relevant security.

A significant factor in structuring a project financing is determining the legal form of the project company, taking into consideration liability and tax effects, based on Norwegian company-related legislation. An SPV in a project financing, which will incur significant investments prior to becoming cash flow positive, will often be incorporated as an unlimited partnership (Delt Ansvar or DA). When an SPV with unlimited partnership generates taxable income, it will not be taxed at the SPV level, but rather flow up to each respective partner based on its ownership share. Each partner will in turn often be incorporated as a limited liability company and can take advantage of group contributions to offset tax income or losses in other parts of the Norwegian tax group. Through this structure and generally speaking, partners with taxable income in Norway can benefit from the tax losses in the SPV’s early phase to offset such taxable income in other parts of the group. The parties would also need to consider each partner’s recourse to other assets to mitigate the unlimited nature of the SPV’s liability.

Also, for any project financings which involve the acquisition of a Norwegian limited liability company, refer to 5.4 Restrictions on the Target setting out the Norwegian financial assistance rules, which are quite strict. As outlined there, in order to be able to benefit from the relevant “whitewash” exceptions and thereby be allowed to obtain guarantees and transaction security from a Norwegian target company, the acquiring entity must be incorporated within the EEA.

Bank financing remains, in the authors’ view, clearly the largest source of project financing in Norway for all construction projects. To some extent, export credit financing providers are also seen being included in these structures. For project financing within the real estate sector, bond financings have also been extensively used, particularly for projects which are out of the construction phase and more into the operations phase (and further development alongside normal operations). Particularly within the real estate sector, but also in some more aggressive corporate refinancings, a more extensive layering of debt sources, with up to three layers of debt, has been seen. A typical example could be super senior bank, senior bond and junior bond.

The most notable requirement in relation to natural resource project developments in Norway is that of public ownership, which entails a requirement for two-thirds public ownership in certain hydropower projects. Moreover, any change of ownership requires governmental approval in other contexts, such as in connection under the Norwegian Petroleum Act and the Marine Energy Act. There is no direct Norwegian ownership requirement on fish farming, but a resource rent tax has been imposed. Finally, and on a general basis, all licence-based operations and businesses will need to comply with the conditions on which the licence is granted, including as regards duration and degree of utilisation.

Broader ESG and HSE concerns remain central to project sponsors’ risk analyses.

Under the Norwegian Transparency Act of 2021, companies are required to carry out due diligence (aktsomhetsvurderinger) on fundamental human rights and decent working conditions in line with the OECD Guidelines for Multinational Enterprises, and they must report on their efforts annually. Also, the labour market in Norway is strictly regulated and all project companies must adhere to detailed rules with regard to salaries, working conditions, and general HSE requirements. Major breaches of relevant HSE requirements can be considered a criminal offence under Norwegian law, whereas less serious offences would typically be settled by fines and/or injunctions to correct the relevant breaches.