Best Project Finance Lawyers in Dhaka

About Project Finance Law in Dhaka, Bangladesh

Project finance is a specialized area of law and finance that focuses on funding large-scale infrastructure and industrial projects through a complex structure of debt, equity, and contractual arrangements. In Dhaka, Bangladesh, project finance is crucial for areas such as power generation, energy, telecommunications, transport infrastructure, and large manufacturing facilities. The framework allows sponsors to raise funds based on a project's future cash flows rather than the balance sheets of its sponsors. Successful project finance transactions often involve multiple parties, including local and international lenders, sponsors, contractors, suppliers, and the government.

Why You May Need a Lawyer

Engaging a lawyer who specializes in project finance can help you navigate the intricate legal, regulatory, and financial landscape associated with such projects in Dhaka, Bangladesh. Common situations where legal help is required include:

• Structuring the project and drafting necessary agreements, including finance, shareholder, and concession agreements
• Conducting legal due diligence to identify potential legal risks
• Negotiating with lenders, government agencies, and other stakeholders
• Advising on security arrangements for project assets and receivables
• Complying with local and international regulatory requirements
• Resolving disputes and handling arbitration or litigation related to the project
• Assisting with land acquisition, environmental clearance, and licensing
• Guiding through cross-border transactions and foreign exchange regulations

Local Laws Overview

Project finance in Dhaka is governed by a combination of local laws, regulations, and international best practices. Key legal areas include:

• Companies Act 1994: Governs the formation and operation of project companies or special purpose vehicles (SPVs)
• Contract Act 1872: Sets out the general principles for contracts and enforceability
• Securities Laws: Regulations related to the raising of capital from domestic and international markets
• Bangladesh Bank Regulations: Oversees foreign exchange controls and lending by local and foreign financial institutions
• Public-Private Partnership Act 2015: Provides the framework for projects involving government participation
• Environmental and Land Laws: Executes regulations regarding environmental clearance, land acquisition, and property rights
• Tax Laws: Addresses issues relating to the taxation of project entities, investors, and transactions

Compliance with these laws is essential to ensure the legality, sustainability, and financial viability of the project.

Frequently Asked Questions

What is project finance?

Project finance is a method of funding projects where lenders and investors rely primarily on the revenue generated by the project for repayment, rather than the general assets or creditworthiness of the project sponsors.

Which sectors commonly use project finance in Dhaka?

Project finance is widely used in power generation, energy (including renewables), transport infrastructure, telecommunication, water supply, and large-scale manufacturing projects.

What types of agreements are essential in a project finance transaction?

Key agreements include loan agreements, shareholder agreements, concession agreements, construction and supply contracts, off-take agreements, and security documents.

What is a special purpose vehicle (SPV) and why is it used?

An SPV is a separate legal entity created specifically for a project. It is used to isolate the project’s assets and liabilities from the sponsors and to streamline legal, tax, and financing arrangements.

Do foreign investors have any restrictions under Bangladeshi law?

Foreign investors usually need to comply with Bangladesh Bank’s foreign exchange regulations, obtain relevant approvals, and ensure compliance with repatriation and taxation rules.

Is government approval necessary for project finance deals?

For projects involving public assets, land, or utilities, government approvals and clearances are often required, especially under the Public-Private Partnership Act and sector-specific regulations.

How are risks allocated in project finance?

Risks are allocated through detailed contractual arrangements, often assigning construction, operational, market, financial, and legal risks to different parties best suited to manage them.

Are project finance transactions subject to taxation?

Yes, project companies, sponsors, and investors are subject to Bangladeshi tax laws, including corporate taxes, VAT, withholding tax, and stamp duties, depending on the nature of the transaction.

How does dispute resolution work for project finance in Dhaka?

Parties can agree to resolve disputes through arbitration, mediation, or the Bangladeshi courts. Arbitration clauses, often with international arbitration, are common in cross-border projects.

Can I raise financing from international lenders?

International financing is possible, subject to compliance with foreign exchange and Bangladesh Bank regulations. Legal advice is essential to ensure all conditions are met.

Additional Resources

Here are several resources and organizations that may be helpful for those seeking further information or assistance with project finance in Dhaka, Bangladesh:

• Bangladesh Bank - The central bank oversees regulations concerning foreign currency, cross-border financing, and related approvals
• Bangladesh Investment Development Authority (BIDA) - Responsible for investment approvals, facilitating foreign direct investment, and providing relevant guidelines
• Power Division, Ministry of Power, Energy and Mineral Resources - Involved in approving and managing energy and power projects
• Public Private Partnership Authority Bangladesh (PPP Authority) - Provides guidance and regulations for PPP projects
• Registrar of Joint Stock Companies and Firms (RJSC) - Governance body for incorporation and registration of project companies and SPVs
• Dhaka Chamber of Commerce and Industry (DCCI) - Offers business guidance and industry insights
• Local law firms with experience in project finance, infrastructure, or corporate law
• International development banks active in Bangladesh, such as the World Bank and Asian Development Bank

Next Steps

If you require legal assistance in project finance, consider the following actions:

• Identify law firms or legal advisors in Dhaka with specific expertise in project finance and related areas
• Gather all relevant documentation and details about your project, including proposed structure, stakeholders, and financing plans
• Arrange an initial consultation to discuss your project, objectives, and legal needs
• Seek advice on risk assessment, compliance, and the most efficient structure for your project
• Request ongoing support for contract negotiation, regulatory compliance, and dispute resolution as your project develops
• Stay updated with changes in relevant laws, policies, and market trends through trusted legal and government sources

Consulting a qualified lawyer early in the project planning phase can safeguard your interests and improve your prospects for success in project finance matters in Dhaka, Bangladesh.