Best Project Finance Lawyers in Dalian

1. About Project Finance Law in Dalian, China

Project finance in Dalian, as in the rest of China, relies on a dedicated financing structure that separates the project’s assets and cash flows from its owners. A Special Purpose Vehicle (SPV) is typically created to own the project, while lenders look to contractual arrangements such as EPC, O&M, and offtake agreements for repayment. Local practice in Dalian follows national PPP and finance guidelines, with project risk carefully allocated among sponsors, lenders, and contract partners.

In Dalian, infrastructure, port, and industrial projects commonly use project finance to secure long-term debt. The process hinges on robust due diligence, clear contractual risk allocation, and stable revenue streams, often supported by government or regulatory approvals under national policies. While there is no standalone “Dalian Project Finance Law,” local practice is shaped by PRC laws and provincial and municipal implementation rules.

PPP policy framework emphasizes clear risk transfer to private partners and rigorous viability assessment for public projects.

The Civil Code governs contracts, property rights and security interests that underpin project finance transactions in PRC.

2. Why You May Need a Lawyer

Engaging a project finance attorney is essential in Dalian to navigate the intersection of national laws, local regulations and financing terms. Below are concrete scenarios where legal advice is crucial.

• You are structuring an SPV for a Dalian port expansion and need precise shareholding, governance, and equity transfer provisions to satisfy lenders and regulators.
• You must draft or review EPC, O&M, and long-term off-take contracts to ensure bankability and align with PRC security interests and foreign exchange rules.
• You plan cross-border lending or a mixed foreign and domestic funding package and need guidance on SAFE approvals, currency controls, and cross-border security.
• You require alignment with PPP policies and local implementation rules, including risk allocation, value-for-money assessments, and lifecycle guarantees.
• You face land use, environmental impact assessments, or zoning approvals in Dalian and need to integrate regulatory steps into the project timetable.
• You seek to enforce or restructure project covenants, or you confront disputes with contractors or offtake counterparties that require PRC contract law expertise.

3. Local Laws Overview

The following PRC laws and regulations are central to project finance in Dalian. They shape structure, risk allocation, and compliance across SPVs, lenders, and sponsors.

• Civil Code of the People's Republic of China - Governs contracts, property rights, and security interests used in project finance. Effective 1 January 2021, it consolidates several civil law regimes into a single framework.
• Guiding Opinions on Public-Private Partnerships (PPP) - National policy framework setting out risk transfer, value-for-money standards, and project selection criteria for PPP projects. Initially issued by the State Council and NDRC in 2014, with ongoing refinements.
• Measures for the Administration of PPP Projects - Administrative rules that govern procurement, project registration, and supervision of PPP arrangements. The financial and regulatory landscape has been updated periodically since 2014 to improve transparency and credit discipline.

These laws interact with sector-specific regulations for infrastructure, environmental impact, procurement, and foreign investment. In Dalian, local implementation offices review compliance with PPP policies and coordinate approvals for large projects with provincial authorities in Liaoning Province.

PPP policy framework emphasizes clear risk transfer to private partners and rigorous viability assessment for public projects.

Fiscal governance and long-term project financing are guided by Ministry of Finance standards, including budget and debt management rules for PPP projects.

4. Frequently Asked Questions

What is project finance and how does a typical SPV structure work in Dalian?

Project finance finances a project using its cash flows rather than the sponsor’s balance sheet. An SPV is formed to own the project, enter into EPC and O&M agreements, and borrow funds. Lenders rely on contractually secured revenues and assets for repayment.

How do I form a Special Purpose Vehicle for a port infrastructure project in Dalian?

Formation involves a PRC company under the SPV model, with clear constitutional documents and shareholder agreements. Local registration with the State Administration for Market Regulation and the relevant Dalian authorities is required.

What governmental approvals are typically required to start a PPP project in Dalian?

Approvals typically include PPP project registration, environmental impact assessment clearance, land use permission, and municipal approvals from the Dalian Development and Reform Commission or equivalent bodies.

What are common securities used to back project debt in PRC project finance deals?

Common securities include mortgages on project assets, pledges of SPV equity, and contractual assignments such as receivables and off-take rights. Lenders also require bindings debt covenants and DSCR maintenance.

Do I need a Chinese contract law specialist if all parties are foreign-invested?

Yes. Chinese contract law, along with the Civil Code and local regulations, governs enforceability, security interests and procedural steps. A native-speaking attorney helps manage bilingual documents and local practices.

How long does the typical project finance negotiation and closing take in Dalian?

Large infrastructure deals in China may close in 6 to 18 months, depending on project complexity and regulatory approvals. Early planning and joint coordination with lenders shorten the timeline.

What is a DSCR and how is it calculated for PRC SPVs?

DSCR is debt service coverage ratio, calculated as net operating cash flow divided by debt service obligations. Most lenders require a minimum DSCR around 1.25 to 1.35 for project finance in PRC deals.

What is the difference between PPP and conventional bank loans in China?

PPP involves government involvement, long-term revenue risk sharing, and structured partnerships. Conventional loans focus on sponsor credit and collateral, with shorter tenor and fewer long-term performance obligations.

Can foreign lenders participate in project finance deals in Dalian?

Yes, under PRC foreign exchange rules and local regulatory approvals. Foreign lenders typically require PRC counsel, local currency arrangements, and clear cross-border security packages.

What costs should I budget for legal due diligence in a Dalian project?

Budget for SPV formation, contract review, due diligence on land, environmental and permits, and cross-border financing documentation. Costs vary with project size and complexity, but a mid-size project may require substantial upfront legal fees.

Are there local environmental and land use laws that impact project finance in Dalian?

Yes. Environmental Impact Assessments and land use approvals affect project viability and timing. Compliance requires integration of EIA findings into the project timetable and financing agreements.

How should I structure off-take agreements to ensure bankability in Dalian projects?

Off-take agreements should provide predictable revenue, creditworthy offtakers, long tenor, and assign robust remedies for under-performance. They are a key source of cash flow for debt service and lender comfort.

5. Additional Resources

These organizations provide official guidance, policy frameworks, and regulatory context for project finance in China and Dalian.

• National Development and Reform Commission (NDRC) - Sets PPP policy framework and oversees large-scale infrastructure project approvals. ndrc.gov.cn.
• Ministry of Finance (MoF) - Provides fiscal governance standards, budget rules, and PPP financing guidance. mof.gov.cn.
• Dalian Municipal Government (Development and Reform Commission) - Local PPP project approvals and implementation guidance for projects in Dalian. dl.gov.cn.

6. Next Steps

1. Define project scope and select the preferred financing model (PPP, pure project finance, or hybrid) with a detailed timeline and budget.
2. Identify and engage a local PRC law firm or attorney experienced in Dalian project finance and SPV structuring. Schedule an initial consultation within 2 weeks.
3. Assemble a due diligence package including site permits, land use rights, environmental approvals, and key contracts (EPC, O&M, off-take).
4. Draft a term sheet covering ownership, risk allocation, security interests, and financing terms. Circulate to sponsors and potential lenders for feedback within 4 weeks.
5. Prepare and file required regulatory approvals (PPP registration, environmental clearance, and land use permission). Plan for 3-6 months of parallel reviews where possible.
6. Negotiate and finalize SPV articles, shareholder agreements, and security packages. Align all documents with PRC contract law and the Civil Code.
7. Close financing and commence project implementation with a detailed governance, compliance, and reporting framework. Set milestone-based reviews for ongoing legal risk management.