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Project finance is a method of funding large-scale infrastructure and industrial projects where repayment depends primarily on the project's own cash flow rather than the sponsors' balance sheets. In Sweden, project finance is used for energy developments, real estate, transport infrastructure, and other complex ventures. Swedish project finance commonly involves consortiums or special purpose vehicles made up of private and public stakeholders. Legal considerations in Swedish project finance require careful navigation of contract law, banking regulations, and sector-specific statutory requirements.
Engaging a lawyer who specializes in project finance can provide critical guidance and protection throughout the lifecycle of a project. Typical situations where legal help is needed include:
A lawyer ensures your project is structured lawfully and that financial risks are properly allocated, helping to reduce exposure to future legal or financial complications.
Sweden has a stable legal environment that is favorable to project finance, though several key local laws and regulations must be considered:
Project finance is a funding technique where the repayment of loans and other financing comes solely from the project's cash flow, with the project assets acting as collateral. It is common for large, capital-intensive projects.
Energy (including wind and solar), transport infrastructure, real estate development, telecoms, and waste management are key sectors where project finance is utilized in Sweden.
Risks are typically allocated to the party best suited to manage them, such as construction risk to contractors, operational risk to operators, and financial risk to sponsors. Detailed contracts specify these allocations.
Often, a Special Purpose Vehicle (SPV) is established to ring-fence the project's assets, liabilities, and risks from its sponsors or parent companies.
Common forms of security include pledges over shares in the SPV, assignments of project contracts and receivables, mortgages on land and buildings, and security over movable assets.
Yes, most major projects need permits for construction and operations. Environmental, planning, financial and sometimes competition authority approvals may also be required.
Yes, foreign investors can participate and invest in Swedish projects, subject to general foreign investment regulations and sector-specific requirements.
The government may participate directly as a partner in public-private partnerships, grant permits, provide funding support, or set sectoral regulations that impact project structuring.
Disputes are usually resolved through negotiation or arbitration, sometimes through Swedish courts, depending on the contracts and parties' agreement.
If the project cannot meet its debts, lenders may enforce their security, and the project's assets may be sold. The sponsors' liability is typically limited to their investment unless further guarantees were made.
If you are seeking further information or support, the following organizations may be helpful:
Trade associations, industry groups, and sector-specific agencies can also provide relevant guidance depending on your project area.
If you are considering a project finance arrangement in Sweden, the following actions are recommended:
With the right legal support and careful planning, you can structure your project finance in Sweden to attract investment while reducing legal and operational risks. Taking early legal advice can make the process smoother and more successful.
