Best Project Finance Lawyers in New Zealand

About Project Finance Law in New Zealand

Project finance is a method of financing large-scale infrastructure, energy, and public works projects in New Zealand, generally based on the project's own ability to generate revenue as collateral for the loan. Instead of relying solely on the balance sheets of project sponsors, funding is repaid from the cash flow produced by the specific project. This approach is frequently used for public-private partnerships (PPPs), renewables projects, transportation, utilities, and other major developments. Project finance law in New Zealand covers a wide range of legal areas, including banking and finance law, securities, contract law, property law, and regulatory compliance. Specialized legal expertise is often required to navigate complex financial structures, multi-party agreements, and regulatory obligations.

Why You May Need a Lawyer

Project finance transactions are highly complex and may involve multiple stakeholders such as financiers, government agencies, contractors, and private investors. You may need a lawyer if you are:

• Developing or investing in large infrastructure, energy, or utility projects
• Entering into public-private partnerships with the government or local authorities
• Raising funds for a major project through syndicated loans or bonds
• Negotiating engineering, procurement, and construction (EPC) contracts
• Navigating permitting and environmental approvals
• Structuring project company and special purpose vehicle (SPV) arrangements
• Ensuring compliance with local laws and regulatory requirements
• Managing project risks, insurance, and security arrangements

Legal advice is critical in structuring deals, drafting agreements, and mitigating risks which can help avoid costly disputes or delays.

Local Laws Overview

Several key aspects of New Zealand law are particularly relevant to project finance:

• Contract Law: Most project finance transactions are founded on detailed contractual arrangements among all parties, including loan agreements, shareholder agreements, EPC contracts, and operation and maintenance agreements.
• Security Interests: The Personal Property Securities Act 1999 governs registration and priority of security interests granted over project assets and receivables.
• Resource Management: Projects often require resource consents under the Resource Management Act 1991 for land use and environmental impact.
• Public-Private Partnership Regulation: The government has guidelines for PPPs, including standardized contracts and risk allocations.
• Taxation: Projects must comply with New Zealand tax laws, including those related to Goods and Services Tax (GST) and income tax, which can affect financing structures and returns.
• Foreign Investment: Overseas Investment Act 2005 may impact projects involving significant foreign investors or sensitive assets, requiring consent from the Overseas Investment Office.

Understanding and complying with these laws is crucial to avoid delays or legal challenges.

Frequently Asked Questions

What is project finance?

Project finance is a method of funding large projects where the project's future revenues serve as the primary source of repayment, and assets or rights are used as collateral.

Who are the main parties involved in a project finance transaction?

The main parties typically include the project sponsor, lenders (often banks or financial institutions), contractors, government authorities, investors, and insurers.

What is a special purpose vehicle (SPV) in project finance?

An SPV is a legally separate entity created to isolate financial risk by owning and operating the project, and to facilitate the raising of finance.

What legal documents are essential in a New Zealand project finance deal?

Key documents often include loan and security agreements, shareholder agreements, EPC contracts, operations and maintenance agreements, and various government approvals or permits.

Do project finance deals in New Zealand require government approval?

Some projects, especially those involving public assets, infrastructure, or foreign investment, may require formal approvals or consents from government agencies.

How are risks allocated among parties?

Contracts typically allocate risks based on which party can best manage or mitigate them, covering aspects like construction delays, cost overruns, regulatory changes, and force majeure events.

Can foreign companies invest in project finance in New Zealand?

Yes, foreign companies can invest, but significant or sensitive acquisitions may require Overseas Investment Office consent under the Overseas Investment Act.

What happens if the project does not generate enough revenue?

If a project underperforms, lenders may exercise their security rights to take control of the project assets, or the equity of sponsors may be at risk. Legal agreements set out the remedies and recourse available.

How does New Zealand law treat environmental and resource consents?

Projects requiring land or resource use must obtain consents under the Resource Management Act, and compliance is strictly monitored to protect the environment.

How can a lawyer help me with project finance?

A lawyer can assist in structuring deals, negotiating contracts, ensuring regulatory compliance, identifying risks, and helping resolve disputes or challenges, ultimately safeguarding your financial interests.

Additional Resources

• Ministry of Business, Innovation and Employment (MBIE) - Provides information and guidelines on infrastructure and PPP projects.
• Reserve Bank of New Zealand - Regulatory information on banking and finance in New Zealand.
• Overseas Investment Office - Guidance on the Overseas Investment Act and foreign investment approvals.
• New Zealand Law Society - Directory of lawyers with expertise in project finance.
• Local Councils and Regional Authorities - Information on resource consents and compliance obligations.

Next Steps

If you are considering engaging in a project finance transaction in New Zealand, it is important to take the following steps:

• Start by identifying the type and scope of your project and potential stakeholders involved
• Assess the regulatory approvals you may require, including resource consents and any permissions for foreign investment
• Prepare a list of key contractual arrangements needed to secure finance and manage project delivery
• Contact a lawyer with experience in project finance to review your plans, provide advice on structuring, and help you navigate legal and compliance issues
• Gather all relevant documentation, such as business plans, feasibility studies, and proof of funding or backing
• Work closely with your legal team to ensure that all requirements are met and risks are properly managed before proceeding

Getting professional legal advice as early as possible can help set your project up for success and prevent avoidable mistakes or delays.