Best Project Finance Lawyers in Kaunas

About Project Finance Law in Kaunas, Republic of Lithuania

Project finance is a specialized area of law and finance where the funding of large-scale infrastructure or industrial projects is primarily secured by the project's future revenues, rather than the general assets or credit of the project sponsors. In Kaunas, the Republic of Lithuania's second-largest city and a significant center for industry and innovation, project finance plays a vital role in areas such as energy, transportation, manufacturing, public infrastructure, and technology ventures. Legal frameworks govern the contractual, regulatory, and financial structures necessary to develop and operate these projects, incorporating international standards and Lithuanian law.

Why You May Need a Lawyer

Project finance involves multiple parties, complex contracts, and substantial investment. You may require legal help in the following common situations:

• Drafting or reviewing project finance agreements, including loan agreements and security documents
• Structuring joint ventures and public-private partnerships (PPPs)
• Navigating regulatory approval processes in Lithuania
• Mitigating risks through appropriate contract terms and insurance
• Resolving disputes between sponsors, contractors, lenders, or public authorities
• Ensuring compliance with Lithuanian and EU laws, including environmental, tax, and public procurement laws
• Addressing cross-border elements in financing and operation

A project finance lawyer can help protect your interests, negotiate favorable terms, and ensure that your project meets all legal requirements in Kaunas and throughout Lithuania.

Local Laws Overview

Project finance in Kaunas is governed by a combination of Lithuanian national laws, European Union directives, and, where relevant, international standards. Some key legal aspects include:

• Security Interests: Lithuanian law allows for various types of collateral and security instruments, including mortgages, pledges, and contractual liens, which are crucial in project finance structures.
• Public-Private Partnership (PPP) Law: Lithuania has specific legislation (Law on Public-Private Partnership) outlining the formation, management, and oversight of PPP projects, including risk allocation and dispute resolution mechanisms.
• Procurement Regulations: Projects involving public investment are subject to the Lithuanian Law on Public Procurement and relevant EU procurement directives. These laws ensure transparency and competition.
• Corporate and Contract Law: Projects often require the formation of a special purpose vehicle (SPV), governed by Lithuanian company law and general contractual principles laid out in the Civil Code.
• Environmental Law: Environmental assessment and permitting are mandatory under Lithuanian and EU law for many large projects, affecting timelines and requirements.
• Taxation: Tax structuring and compliance are important considerations, with various incentives and liabilities potentially applying depending on the project type and financing structure.
• Cross-Border Regulations: For international players, compliance with currency, investment, and financial transaction rules is essential.

Frequently Asked Questions

What is project finance and how does it work in Kaunas?

Project finance is a method of funding where the project itself is financed with limited recourse to the sponsors, relying mainly on the projected cash flows for repayment. In Kaunas, this typically involves a mix of Lithuanian legal requirements and European standards tailored to the project type, such as infrastructure or energy.

What types of projects commonly use project finance in Kaunas?

Major infrastructure projects, renewable energy developments, industrial factories, real estate development, and transport-related projects frequently use project finance structures in Kaunas.

What legal entities are usually involved in project finance deals?

Usually, a special purpose vehicle (SPV) is established for project implementation. Other entities include lenders, sponsors, contractors, suppliers, and sometimes government agencies.

Do I need to comply with EU laws in addition to Lithuanian laws?

Yes. Lithuania is an EU member, so EU regulations, especially on procurement, competition, and the environment, apply to projects in Kaunas alongside national and local laws.

How are risks typically allocated in project finance agreements?

Risks are allocated contractually among the parties, often assigning construction risk to contractors, operating risk to operators, and demand risk to the sponsors or offtakers. Lenders are protected with various security instruments under Lithuanian law.

Can a foreign company participate in project finance deals in Kaunas?

Yes. Foreign companies can invest, lend, or sponsor projects in Lithuania, though they must comply with local laws regarding company formation, permits, and financial transactions.

What are the regulatory requirements for launching a new infrastructure project?

Projects may require multiple permits, including but not limited to construction permits, environmental assessments, land use approvals, and compliance with public procurement procedures if state funds are involved.

How long does it take to set up a project finance structure?

Timelines vary but can range from several months to over a year, depending on the complexity, regulatory approvals needed, and the number of parties involved.

What happens if there is a dispute during the project?

Dispute resolution mechanisms are usually set out in the finance and project agreements. Options include negotiation, Lithuanian courts, or arbitration in Lithuania or abroad, depending on the agreement.

How can a lawyer help me in a project finance transaction?

A project finance lawyer can assist in drafting and negotiating agreements, ensuring regulatory compliance, structuring security and SPV arrangements, managing due diligence, and representing your interests if disputes arise.

Additional Resources

For further information and assistance with project finance in Kaunas, the following resources can be valuable:

• Lithuanian Ministry of the Economy and Innovation - for guidelines on investment and PPPs
• Kaunas City Municipality - for permits, local regulations, and public procurement procedures relevant to city projects
• Invest Lithuania - a national investment promotion agency that can help foreign investors and sponsors
• Lithuanian Chamber of Commerce, Industry and Crafts - for networking and information on business conditions in Kaunas
• Bank of Lithuania - the country's financial sector regulator, useful for advice on finance and currency controls
• Lithuanian Bar Association - for referrals to specialized project finance lawyers

Next Steps

If you require legal assistance with project finance in Kaunas, Republic of Lithuania, consider the following steps:

1. Identify the key aspects and objectives of your project in detail
2. Gather all available documentation and information about proposed partners, financing, and project design
3. Contact a qualified lawyer or law firm with expertise in project finance and knowledge of Lithuanian legal requirements
4. Schedule an initial consultation to assess your needs and the potential challenges specific to Kaunas or Lithuania more broadly
5. Work with your lawyer to conduct due diligence, structure agreements, and ensure full compliance with all legal and regulatory requirements
6. Maintain regular communication with your legal team to manage risk and address issues as the project progresses

By seeking professional legal support early, you can improve the chances of your project's success and avoid costly delays or disputes.