Value Chain in Energy

Overview

Key issues

How the project will be structured will depend on legal, regulatory, tax, operational, accounting and commercial considerations.  Key factors include:

• Project financing: structuring will play a key part if investors may wish to take project finance over discrete components of the project only, and isolate themselves and the remainder of the project from recourse by lenders. Anticipating potential project financiers' requirements could make access to competitive finance much easier.
• Future divestitures: a properly structured project will avoid the need for complicated restructuring at the time of sale of its discrete components.
• Investor entry and exit: proper structuring allows additional investors to come in, or foundation investors to exit; pre-emption rights will be of interest to lenders who may insist that the foundation sponsor group to remain until full repayment.
• Each investor's role: A comprehensive, whole of project, approvals plan can be critical in the successful delivery of the project. Investors must clearly delineate responsibilities from the outset and properly document them.