Aspectos legales relevantes de un project finance de renovables con power purchase agreement

Abstract

The project finance transaction explained in this article presented various complex legal issues arising from the contractual architecture of the project, the many counterparties that were involved in it and the pari passu doublefinancing structure between commercial banks and an institutional non-forprofit bank. In particular, this article explains the equity contributions committed by the sponsor, the order for the utilisation of the various financings made available to the borrower, the implications for the financing structure resu Iting from the existence of a power purchase agreement, and the recourse limitations vis-à-vis the sponsor and the project accepted by some finance parties. The context was as follows: the financing of the construction and development of four wind farms by a foreign industrial sponsor without previous presence in the Iberian market, structured by way of two independent financings granted by a syndicate of commercial banks and the institutional nonfor-profit bank, and the entering into the negotiations of a non-expected third party, the offtaker under a power purchase agreement. All the relevant legal matters were successfully settled through the implementation of innovative solutions that managed to align the interests of the sponsor and the financial and commercial creditors.