Best Project Finance Lawyers in Georgia

About Project Finance Law in Georgia

Project finance is a specialized branch of finance wherein the lending is secured by the future cash flow generated by a particular project, such as infrastructure, energy facilities, or large commercial developments. In Georgia, project finance plays a crucial role in fostering economic growth and development, particularly in sectors like energy, transportation, and telecommunications. The country has tailored its legal framework to attract local and international investment by ensuring flexible, transparent project finance arrangements. Georgia’s strategic location, business-friendly policies, and growing economy make it a favorable environment for project-based investments.

Why You May Need a Lawyer

Engaging with project finance in Georgia involves a mix of legal, financial, and regulatory challenges. Here are several situations where seeking legal help is essential:

- Structuring agreements with local or international investors - Drafting and negotiating contracts such as power purchase agreements, concession agreements, and construction contracts - Ensuring compliance with Georgian laws and international regulations - Navigating risk allocation between parties in complex projects - Handling the registration and perfection of security interests - Assisting with licensing, environmental, and land use permits - Advising on tax implications and incentives offered under Georgian law - Resolving disputes arising from project implementation or financing - Conducting due diligence on project assets and counterparties - Facilitating communications with government agencies and regulatory bodies

Local Laws Overview

Project finance in Georgia is shaped by a combination of laws, regulations, and international best practices. Some of the most important legal considerations include:

- Property and Land Law: Investors must ensure proper land ownership or lease rights, as well as obtain the correct permits for project development. - Contract Law: Georgia follows principles of freedom of contract, but certain agreements - for example, in the energy or natural resources sector - must adhere to sector-specific statutes. - Securities Law: Security interests can be established over assets, rights, and receivables. The Civil Code of Georgia governs the creation and enforcement of pledges and mortgages. - Public-Private Partnerships (PPP): Specific regulations exist for PPP projects, including the Law on Public Private Partnerships which sets the framework for collaboration between the public and private sectors. - Taxation: Georgia offers various tax incentives for investment in strategic sectors. Understanding VAT, corporate income tax, and other obligations is crucial. - Licensing and Environmental Compliance: Projects may require multiple licenses and must comply with environmental impact assessments as per Georgian law. - Dispute Resolution: Georgia recognizes both local courts and international arbitration for resolving project finance disputes.

Frequently Asked Questions

What is project finance and how is it different from traditional financing?

Project finance involves raising funds specifically for a single, large-scale project, with repayment primarily coming from the project’s revenues. Unlike traditional financing, the borrower’s full balance sheet is not pledged; instead, lenders rely on the project's cash flows and assets.

Which laws regulate project finance in Georgia?

Project finance is regulated by the Civil Code, Law on Public Private Partnerships, the law on Licenses and Permits, tax laws, and special sector legislation such as the Law on Electricity and Natural Gas.

Can foreign investors participate in project finance initiatives in Georgia?

Yes, Georgia encourages foreign investment. There are minimal restrictions for foreign investors in most sectors, and the legal system is designed to protect their interests.

What types of projects are commonly financed using project finance structures in Georgia?

Common projects include energy facilities (hydropower, wind, solar), transport infrastructure (roads, airports), and large-scale hospitality or real estate development.

Are there any tax incentives for project finance investments?

Yes, Georgia provides several tax incentives and benefits for investment in priority sectors such as energy, manufacturing, and export-oriented businesses.

How can security interests be established in a project finance transaction?

Security interests over assets, receivables, and land can be established through pledges, mortgages, and assignments, in line with the Civil Code of Georgia and related legislation.

Do I need approvals or permits to launch a project in Georgia?

Most large-scale projects require licenses, permits, and environmental assessments. The requirements depend on the nature and sector of the project, and legal guidance is often needed to navigate these processes.

Is international arbitration available for resolving project disputes in Georgia?

Yes. Georgia is a party to the New York Convention and recognizes international arbitration awards, making it a preferred choice for resolving complex project finance disputes.

What is the role of government agencies in project finance?

Government agencies may be involved as partners in PPPs, regulators for licensing and compliance, or as facilitators for foreign investment.

How can I ensure that my interests are protected in a project finance agreement?

Working with an experienced Georgian project finance lawyer is essential. Legal counsel ensures proper risk allocation, contract clarity, security for investments, and compliance with local regulations.

Additional Resources

For further information on project finance and legal requirements in Georgia, consider reaching out to the following organizations and resources:

- Ministry of Economy and Sustainable Development of Georgia - Enterprise Georgia (investment promotion agency) - Georgian National Energy and Water Supply Regulatory Commission - Georgian Bar Association (for finding qualified lawyers) - Association of Banks of Georgia - Chamber of Commerce and Industry of Georgia

Next Steps

If you are considering entering into a project finance transaction in Georgia, here is how you can proceed:

1. Clearly define your project’s goals and financing needs. 2. Gather all necessary information about the project’s assets, stakeholders, and potential contracts. 3. Consult with a Georgian lawyer specializing in project finance to assess compliance, licensing, and structuring issues. 4. Work closely with your legal advisor to draft and review all contracts, security agreements, and permitting documentation. 5. Communicate with relevant government agencies early to facilitate approvals and permits. 6. Ensure all documentation and due diligence is thorough to protect your interests and minimize risks.

Legal support is invaluable for ensuring a successful, compliant, and secure project finance transaction in Georgia. Starting with the right legal advice can save time, resources, and safeguard your investment.