Financing and Developing International Renewable Energy Projects in Challenging Times
Recorded on Tuesday, June 7, 2016:
2:00 - 3:30 pm Eastern US Time
The renewable energy sector, particularly wind and solar, has seen rapid expansion globally among both in established and emerging markets. Given public policy concerns about addressing climate change, carbon emission reduction, energy independence and diversification of energy supplies, the outlook for international development of renewables should be positive. In addition, demand for electricity in developing markets will continue given it is essential for sustained growth. Consequently, we see increased interest in an array of incentive programs, different types of energy auctions and renewable energy mandates and policies, particularly in Latin America, Africa and the Middle East. At the same time, financing for international projects has become more challenging to obtain given concerns about the future growth prospects of emerging markets, turmoil in energy markets due in large part to concerns about global growth and the drop in oil and gas prices, and the attendant retreat of global banks and investors from financing projects in emerging markets.
The key elements of an international project are largely the same as those for a U.S. or European project:
- Will the project sell electricity under a long-term contract or on a merchant basis?
- How will the project be developed (e.g. site control, construction and permitting)?
- What types of contractual arrangements will be used to construct and operate the project?
Given the tightening availability of financing, developers must anticipate facing additional questions and issues when undertaking the development and financing of renewable energy projects in emerging markets, particularly when renewable energy is relatively new to that market, including:
- Identifying all potential sources of capital and financing given an increasingly fragmented market for finance and perceptions of the host country.
- Assessing and evaluating country-specific renewable energy programs, including different incentive regimes, market auctions, and policy mandates.
- Assessing the investment climate and legal environment for renewable energy projects and private investment in the host country.
- Conducting diligence on local partners and arrangements and assessing offtakers, particularly state-owned enterprises.
- Structuring projects given the host country’s tax and regulatory framework, particularly as it relates to inbound and outbound capital flows and other relevant regulations.
- Identifying legal counsel, advisors and consultants in the host country.
- Options and tools for mitigating country and counterparty risks.
Please join us for what promises to be a timely discussion of these topics and issues related to the financing of this global expansion of renewable energy with seasoned professionals with first-hand experience advising clients on developing and financing projects around the world, particularly in new markets.
Jorge H. Kamine, Counsel, SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
Paul S. Kraske, Partner, SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
Paulo Martelli, Lead Investment Officer, Infrastructure & Energy Division, INTER-AMERICAN INVESTMENT CORPORATION (IIC)
Nancy Rivera, Managing Director, Structured Finance, OVERSEAS PRIVATE INVESTMENT CORPORATION (OPIC)
Charlie Williams, Executive Vice President of Finance, SONNEDIX USA SERVICE LTD.