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Legal guides written by Tekin Law Firm:
Project finance is a specialized legal and financial technique used to fund large-scale projects-such as infrastructure development, renewable energy installations, transportation hubs, and public utilities-by creating a separate legal entity for the project. In Istanbul, which is both a vibrant economic powerhouse and a gateway to international trade, project finance is a crucial mechanism for driving growth and development, especially in sectors like energy, transportation, and construction. The structure typically involves securing loans and investments that are repayable primarily from the cash flow generated by the project itself, rather than the general assets or creditworthiness of the project sponsors.
Engaging in project finance ventures involves navigating complex legal, regulatory, and financial waters. A lawyer’s expertise is essential in several common situations, such as:
A knowledgeable lawyer ensures compliance, protects your investment, and helps mitigate risks in a dynamic and sometimes unpredictable regulatory environment.
Project finance in Istanbul operates within Turkey's comprehensive legal system, heavily influenced by both civil law principles and international standards. The Turkish Commercial Code, Banking Law, Capital Markets Law, and sector-specific regulations (such as those for energy, transportation, and construction) play key roles. Istanbul's strategic importance means that local regulations may prioritize both investor protection and public interest, particularly in large infrastructure projects.
Certain considerations for project finance in Istanbul include:
Project finance involves raising funds specifically for a project using its future cash flows as security, rather than relying on the balance sheet or assets of sponsors. This allows for non-recourse or limited recourse financing.
Yes, foreign participation is common and encouraged. Investors, however, must adhere to investment, currency, and registration regulations and may face additional scrutiny in certain strategic sectors.
Large infrastructure ventures-such as highways, airports, bridges, energy plants, pipelines, and urban regeneration projects-are the primary candidates for project finance.
An SPV is a separate legal entity created to isolate financial risk. In Turkish project finance, SPVs are used to carry out the project, hold the project's assets, and engage with lenders and contractors.
Most significant projects require various approvals or permits from municipal, provincial, and national authorities, especially if public land, infrastructure, or environmental resources are involved.
Several laws may apply, including the Turkish Public Procurement Law, Build-Operate-Transfer regulations, and sector-specific statutes. PPP projects also involve contracts with the relevant public authorities.
For projects deemed to have strategic importance, particularly in infrastructure, energy, or transportation, the Turkish government may provide guarantees or support mechanisms on a case-by-case basis.
Contractual disputes are often resolved through arbitration, which may be domestic or international. Turkey is a signatory to key arbitration conventions, making enforcement of awards generally reliable.
Security interests such as pledges over movables or mortgages over immovables must be registered with the relevant Turkish registries for effectiveness and enforceability.
Taxation depends on the project structure, the legal status of parties, and transaction types. Consult a tax lawyer or advisor to navigate corporate income tax, VAT, and withholdings relevant to your project.
If you need further information or official guidance, consider consulting the following Turkish institutions:
If you are considering a project finance venture in Istanbul, it is highly recommended to consult with a local lawyer experienced in project finance. Begin by gathering all relevant project details, your business plan, intended partners, and proposed financing structures. Search for qualified law firms or practitioners, ideally with international experience, and schedule an initial consultation. Early legal advice will help you structure your project lawfully and efficiently, avoid common pitfalls, and position your initiative for successful financing and implementation.
For more detailed, project-specific advice, reach out to professional legal associations or sector organizations in Istanbul to find a specialist. Your legal partner will guide you through due diligence, negotiations, and regulatory procedures, ensuring a smoother pathway from conception to completion.
