Best Project Finance Lawyers in Peru

About Project Finance Law in Peru, United States

Project finance is a specialized area of law and finance that focuses on the funding of long-term infrastructure and industrial projects using a non-recourse or limited recourse financial structure. In simple terms, this means that loans and investments for these projects are secured primarily by the project's assets and cash flow, not by the general assets or creditworthiness of the project sponsors.

In Peru, project finance has become increasingly prominent, especially for infrastructure, energy, and mining projects. The United States boasts one of the world's most established project finance markets, used widely in energy, transportation, and public-private partnership (PPP) projects. Both countries have unique legal frameworks and regulations that govern how projects are structured, financed, and managed.

Why You May Need a Lawyer

Project finance transactions are highly complex and involve multiple legal and financial considerations. Situations where legal help may be essential include:

• Negotiating and drafting project contracts such as construction, operation, and concession agreements
• Structuring the project to comply with local regulations and tax requirements
• Securing loans, investment, or guarantees from banks or multilateral agencies
• Addressing environmental, social, and permit obligations
• Navigating government approvals and licenses
• Managing risks related to unexpected cost overruns, delays, or disputes
• Understanding cross-border legal and financial implications

Engaging a lawyer with expertise in project finance can help safeguard your interests, improve deal certainty, and avoid costly mistakes during any phase of your project.

Local Laws Overview

Peru: Project finance in Peru is governed by a combination of civil, commercial, and specific infrastructure or energy laws. The government promotes investment through public-private partnerships and concessions, regulated by the Agency for Promotion of Private Investment (ProInversión). Key considerations often include:

• PPP legislation and guidelines
• Securitization of future cash flows
• Foreign investment protections and currency controls
• Environmental impact assessments and permitting
• Tax incentives and stability agreements
• Government guarantees and force majeure provisions

United States: Project finance laws in the US involve federal, state, and local regulations. Important aspects include:

• Securities and Exchange Commission (SEC) compliance for investment structures
• Federal laws like the Clean Air Act or National Environmental Policy Act (NEPA)
• State-specific PPP or concession statutes
• Permitting and environmental review processes
• Bankruptcy and creditor rights laws
• Tax equity structures, especially for renewable energy

Understanding and navigating these frameworks is crucial for successful and legally compliant project finance transactions in either country.

Frequently Asked Questions

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

Project finance refers to the funding of projects based on the projected cash flows of the project rather than the balance sheets of project sponsors. It is non-recourse or limited recourse, meaning lenders have limited claims on the sponsors if the project fails.

What types of projects typically use project finance?

Large-scale infrastructure projects such as highways, energy plants, airports, railways, and mining facilities are most commonly financed this way. Both public and private entities can participate.

What are the key stages in a project finance deal in Peru or the US?

Key stages include project identification, feasibility studies, contract negotiation, financial structuring, securing permits and approvals, financial close, construction, and operations.

Are there restrictions on foreign investment in project finance projects?

Both Peru and the United States are open to foreign investment, but there may be sector-specific regulations and requirements, particularly in areas affecting national security or strategic infrastructure.

How are risks typically allocated in project finance agreements?

Risks are carefully allocated among parties through comprehensive contracts. For example, construction risk is often assigned to contractors, while payment risk might remain with the project company.

What role do government agencies play in project finance?

Government agencies may grant concessions, guarantees, or permits, especially in public projects. They can also regulate tariffs, oversee compliance, and provide dispute resolution mechanisms.

How do banks and lenders protect their interests in project finance transactions?

They conduct detailed due diligence, require security over project assets and cash flows, impose covenants on the project company, and may seek government or multilateral guarantees.

What environmental regulations affect project finance in Peru and the US?

Both countries have strict requirements. Environmental impact assessments, permits, and ongoing compliance are mandatory. Non-compliance can halt projects and lead to fines or losses.

Are there tax incentives for project finance in Peru or the US?

Yes, both countries offer various tax benefits, especially for renewable energy and infrastructure. These may include tax credits, accelerated depreciation, and exemptions.

What happens if a project fails or goes bankrupt?

Lenders may enforce security interests and take ownership of project assets or control project operations. In both countries, bankruptcy or insolvency laws provide frameworks for restructuring or liquidation.

Additional Resources

For further information, consider consulting the following:

• Peru: ProInversión (the national PPP and investment promotion agency), Ministry of Economy and Finance, Superintendencia del Mercado de Valores (SMV)
• United States: US Department of Energy Loan Programs Office, Federal Energy Regulatory Commission (FERC), Securities and Exchange Commission (SEC), state-level infrastructure or PPP offices
• International organizations: The World Bank, International Finance Corporation (IFC), Inter-American Development Bank (IDB)
• Industry associations: American Bar Association - Project Finance Committee, Peruvian Association of Infrastructure (Asociación para el Fomento de la Infraestructura Nacional)

Next Steps

If you need legal assistance with a project finance matter in Peru or the United States, consider the following steps:

• Gather all project documents, contracts, permits, and financial information
• Identify the scope and location of your project to determine applicable laws and necessary permits
• Research and reach out to law firms or attorneys with expertise in project finance in the relevant jurisdiction
• Prepare a list of questions and concerns to discuss during your initial consultation
• Engage a lawyer early in the process to help with structuring, negotiations, and compliance
• Stay informed about changing regulations and legal requirements throughout your project

Timely legal advice can help mitigate risks, facilitate smooth financing, and secure project success in both Peru and the United States.