Best Project Finance Lawyers in Finland

About Project Finance Law in Finland

Project finance is a specialized area of finance where lending is based primarily on the projected cash flow of a specific project rather than the balance sheets of the project sponsors. In Finland, project finance is commonly used for large infrastructure developments, energy projects, real estate, and public-private partnership (PPP) projects. Finnish law provides a robust legal framework that facilitates both domestic and cross-border project finance, ensuring security for lenders and predictable outcomes for all parties involved.

Why You May Need a Lawyer

There are many reasons why individuals and organizations might need legal advice in project finance. Some common situations include:

• Structuring and negotiating complex project finance agreements for new developments
• Conducting due diligence on regulatory and contractual risks
• Securing funding from banks, private equity, or other institutions
• Drafting and reviewing project-related contracts such as construction, operation, and maintenance agreements
• Ensuring compliance with Finnish and EU regulations
• Resolving disputes between project partners, contractors, or financiers
• Advising on refinancing, restructuring, or exiting a project
• Navigating public sector tendering and procurement laws

Local Laws Overview

Project finance in Finland operates within a well-defined legal and regulatory framework that incorporates Finnish national laws and European Union directives. Some key aspects include:

• Security interests: Finnish law allows for the creation of various security interests, such as pledges over movable and immovable property, which are essential for lenders in project finance deals.
• Contract law: The Finnish Contracts Act governs the validity and enforcement of agreements including project documentation, joint venture agreements, and EPC contracts.
• Public procurement: Many infrastructure projects involve the public sector which is governed by Finland’s Act on Public Procurement and Concession Contracts, aligned with EU directives.
• Environmental and planning regulations: Numerous permits and compliance checks are needed for project development, particularly in sectors such as energy, construction, and natural resources.
• Bankruptcy and insolvency laws: The Finnish Bankruptcy Act and Restructuring of Enterprises Act detail creditor rights and protections in the event of project distress or insolvency.
• Tax issues: Tax structuring is often critical in project finance, involving VAT, corporate tax, and international tax treaties to avoid double taxation.

Frequently Asked Questions

What is project finance and how does it differ from traditional corporate finance?

Project finance involves structuring funding around the specific revenue and assets of a standalone project, not the overall balance sheet of the sponsor or parent company. The project’s assets and contracts provide security for lenders.

What types of projects in Finland typically use project finance structures?

Typical projects include large-scale energy ventures such as wind farms and bioenergy plants, transportation infrastructure, PPPs for hospitals or schools, and commercial real estate developments.

What are the common sources of funding for project finance in Finland?

Funding can come from commercial banks, international financial institutions, export credit agencies, equity investors, and increasingly from institutional investors such as pension funds.

How is risk allocated among the parties in a project finance transaction?

Risks are allocated contractually according to which party is best able to manage them. For example, construction risk often remains with the contractor, while financing risk is borne by lenders and sponsors.

What legal documents are needed for a typical project finance transaction?

Core documents include loan and security agreements, shareholder agreements, construction and supply contracts, operation and maintenance agreements, and often government permits or licenses.

How do environmental regulations affect project finance in Finland?

Environmental considerations are significant. Projects must obtain necessary permits and demonstrate compliance with Finnish and EU environmental laws. Non-compliance can delay or prevent funding.

What happens if a project faces financial difficulties or insolvency?

Lenders rely on security interests and step-in rights. Finnish insolvency laws provide options for restructuring or liquidation, and secured creditors have priority in recovery.

Can foreign investors participate in project finance deals in Finland?

Yes, Finland is open to foreign investment. Legal frameworks facilitate cross-border financing, subject to compliance with local laws and any applicable sector-specific restrictions.

Do public-private partnership (PPP) projects follow different rules?

PPP projects are subject to additional public procurement laws and guidelines. These require transparent tendering and may involve specific forms of government support or guarantees.

Is legal due diligence necessary in Finnish project finance?

Yes, thorough due diligence is crucial to identify potential legal, regulatory, or contractual obstacles and ensure all consents, permits, and approvals are in place before financial close.

Additional Resources

People seeking more information or guidance on project finance in Finland can contact or consult the following:

• Finnish Financial Supervisory Authority (FIN-FSA): Supervises banks, insurance companies, and other financial market participants
• Ministry of Economic Affairs and Employment of Finland: Offers information on investment, public-private partnerships, and project permits
• Finnish Competition and Consumer Authority (FCCA): Advises on public procurement competitions and fair practices in large projects
• Confederation of Finnish Industries (EK): A business organization providing insights into infrastructure and industrial project development
• Local law firms and specialized financial consultants who focus on project finance

Next Steps

If you are considering involvement in a project finance transaction in Finland or face legal questions about an ongoing project, it is important to:

1. Define the scope and objectives of your project clearly
2. Prepare all necessary background information and project documentation
3. Consult a Finnish lawyer or legal advisor specializing in project finance at an early stage
4. Ensure all regulatory, permit, and compliance requirements are met well in advance
5. Arrange for legal due diligence to identify and manage risks proactively

Qualified legal advice can help structure your project efficiently, facilitate access to funding, and help avoid costly legal or regulatory issues down the line.