Project Finance: Jurisdictional Comparisons

Questions covered in author Q&A:

1. Introduction and Legal Framework

1.1 Please provide a brief history of project finance in your jurisdiction and describe its present day importance.  
1.2 An overview of the legal framework
1.3 Public-Private Partnership legislation

2. Regulatory Considerations

2.1 Is there a history of State ownership or repatriation of assets in your jurisdiction?    
2.2 Do any specific laws apply to govern foreign investment in your jurisdiction?  Are any limitations or prohibitions placed on foreign investment? 
2.3 What environmental, health or safety laws or regulations apply to projects?  What regulatory administer those laws and what are their powers?
2.4 What governmental approvals are required for project transactions and what fees are payable as a result?  Are there any filing or registration requirements required in respect of any of the project documents with any governmental bodies?  

3. Structuring the deal, investment and exit considerations

3.1 What legal form do project companies typically take and what are the principal considerations behind the choice of such form when compared to alternatives?
3.2 Are there any regulations/rules relating to the permitted ownership of a project company?
3.3 Who are the main investor classes in project finance transactions and what sources of finance are typically available?
3.4 What is the usual governing law for any of the project contracts or financing agreements?  Is it enforceable for a party to submit to the laws of a foreign jurisdiction?  If the state were to enter into a waiver of immunity would it be enforceable?
3.5 Title to assets
3.6 Regarding insurance arrangements, are there any considerations in respect of insurance policies provided by foreign companies?  What costs exist in respect of such policies?  Can the proceeds be payable to persons, such as foreign creditors, other than the local project company?
3.7 Are workers from outside the jurisdiction permitted to work on a project?  Do any restrictions apply?
3.8 Regarding the equipment required for use on the project, are there any importation restrictions? 
3.9 Are there any restrictions relating to foreign investment in a project company, such as restrictions relating to the payment of dividends, or repayment of shareholder loans from a project company to its foreign parent?  

4. Taxes, Duties, Charges and restrictions on the movement of monies

4.1 Please describe any specific tax incentives available to foreign investors relating to their investment in any particular projects?  Are any fees, taxes or other charges payable in respect of such investment in a project company?4.2 What taxes, duties or royalties are payable in respect of the extraction of minerals or other natural resources?  What is the basis of the charge?
4.3 Are there restrictions, fees or taxes relating to the export of minerals or natural resources?
4.4 Are project companies required to repatriate foreign earnings?  If so, do they need to be converted to local currency or are there any other restrictions in place over their use?
4.5 Are there any restrictions on project companies setting up and using foreign currency accounts, both in the jurisdiction and outside?
4.6 Are there any foreign treaties that assist a foreign entity investing in a local project company?

5. Security and enforcement considerations

5.1 What types of security are available?
5.2 Can a lender assure the priority of its security interest over any competing security interests?  Please describe any limitations or exclusions that may apply to such a lender gaining priority.
5.3 How are security interests perfected?  Are any fees or other charges payable and how can their cost be minimised?  
5.4 Does the law permit an agent or a trustee to hold security on behalf of a group of lenders?
5.5 What steps or other formalities are required in order for a lender to enforce its security?  How long will such proceedings take?
5.6 Can a lender foreclose or appropriate against an asset?  Please describe any restrictions that apply?  
5.7 Please describe how any form of bankruptcy proceedings affects a lender’s ability to enforce its security rights over a project company’s assets?  Do any preferential creditor rights apply?  Are court proceedings required in order to be able to seize an asset and if so how? 
5.8 Are there laws governing contracts which the local courts will not recognise?
5.9 Do local courts recognise and uphold international arbitration provisions?  Please also describe any exceptions. 

6. Current Topics