IFLR 1000
The Guide to the World's Leading Financial Law Firms

Renewable energy continues to dominate the project finance sphere in Germany. The countries first off-shore wind farm delivered through a project financing closed in February 2011 and lawyers attest that they are working on others which are in formative stages, in addition to solar projects in more viable climates. "What we've done in the last 12 months is many, many renewable deals. We are about to close two offshore wind financings and we've also been very busy on solar deals some of them in Germany but also a couple of them in other countries mainly France but also Italy has just started," explains one lawyer.

After the Japanese Fukishima nuclear disaster, the German government closed seven reactors temporarily and announced plans to eradicate the use nuclear power completely by 2022 rather than in 2036 as it had originally planned. As the country currently only has the one fully operational wind farm these revelations have only served to further invigorate the market and projects lawyers are eagerly anticipating a dependable deal flow for years to come that will be engendered by these plans. "Nuclear power accounts for 22% of our needs, which is quite huge" says one partner. "We have many industries which means for us there will be very large projects on the renewable side: offshore wind; onshore wind; waterpower; solar."

There is a perceived problem in the government's plans, the existing power grid does not extend from the north to the remainder of Germany. With wind energy the country's only viable option as the climate will not support solar and the north the only area with a coast to generate sufficient wind power, the grid will need to be expanded to transport this energy to the remainder of the landlocked country. This of course only means one thing: more projects. "There will be a huge spend in upgrading and expanding the national power grid and we're probably talking about the investment of several billion Euros into our power grid, which is an excellent trend and an excellent development for lawyers," explains an animated project finance lawyer.

Investors are aware of the potential and lawyers anticipate there will be attempts to acquire interests in projects which are already active. One lawyer remarked on this new trend: "What we also expect is that private equity houses, their infrastructure funds will invest into existing project financings and we also see secondary trade in projects."

Experienced and competent, Clifford Chance's project finance practice still remains the leader in its field and wins the praise of its competitors. "Clifford Chance is a huge practice and has been developed for many years and they are very active."

Partners Beda Wortmann and Riko Vanezis finalised deals for the financing of three notable renewable projects in 2010. Most recently, Wortmann acted for Commerzbank on the financing of a windfarm in Sweden for HgCapital which closed in August 2010.

Back in July last year, Wortmann also completed a deal for the financing for a solar farm in Intrasskirchen, Germany. The firm's clients were Commerzbank and KfW IPEX-Bank who supplied the €157 million vestment. The sponsors of the project are Germany-based Q-Cells and MEMC Electronic Materials, a US manufacturer of silicon wafers. The solar farm is the largest free-field photovoltaic plant of its kind in Germany.

Wortmann also closed one of the largest renewable energy projects of its kind in the world with a total investment worth some €7 billion. KfW IPEX-Bank were the firm's clients on the project financing for another Swedish wind farm.

Competitors observe that the firm has been busy in the last 12 months: "We've seen Freshfields a lot," explains a partner. "We are pitching at the moment for a project and they are on the other side. They have one partner who we know is concentrating on the project finance side," continues the partner referring to practice head Daniel Reichert-Facilides. There is a growing sentiment in the market that the firm is gaining on the only firm ranked above it and that it is only time that will keep them in separate tiers.

PPP (public-private partnership) deals are scarce in Germany but the firm was active for a consortium of bidders led by Hochtief PPP Solutions and Hermann Kirchner Projektgesellschaft, a subsidiary of Strabag, on the extension, operation and €299 million financing of a portion of A8 II motorway in Bavaria recently. The European Investment Bank (EIB) provided a loan of up to €149 million loan and a €59.6 million LGTT guarantee.

The firm was employed in Belgium on its other PPP highlight. Partner Christian Bunsen advising PPP Schulen Eupen, a joint venture of CFE Belgium and SKE Facility Management on the DBFM contract and financing arrangements for a €146 million invest school project in Eupen. The 27 year project will be financed by Fortis Bank, KBC Bank, ING Belgium and Dexia Bank Belgium.

Financing transactions in the energy sector was another important area for the firm and it advised long standing client HSH Nordbank on the two project financings for photovoltaic power plants in Spain, a €31.8 million 6.34 MW plant in Villamartin and a €12.5 million 2MW plant in Mónovar. The deals reached financial close in August and December 2010, respectively. Currently the firm is advising the bank on the financing of a portfolio consisting of a 9.9MW solar park in Zamora and a 4MW solar park in the province of Salamanca, Spain.

Additional energy related work saw the firm advise Q-Cells International on the sale of the 42 MW photovoltaic power park Finsterwalde 1 in Brandenburg to LHI Leasing. Reichert closed the €130 million deal in January 2011.

Since its inception five years ago the Linklaters project finance practice has been gaining momentum and market share and its competitors affirm that the projects team are very active.

The firm is developing a niche in the area of wind energy and has been active for the banks on Germany's first ever project financing of a wind farm. Eva Reudelhuber and Wolfram Distler led a syndicate of 11 banks on the €550 million financing for Borkum West II, which closed in December 2010. The firm is working on a number of additional off-shore wind farms in Germany but the details currently remain confidential.

A continuing role sees Reudelhuber advising Q-Cells International on the development, financing and sale of several solar projects in Germany.

A notable cross border deal saw Reudelhuber and Distler negotiating for German bank NORD/LB on the financing of two solar farms in Les Mées in France, which are sponsored by the German fund Doric Asset Finance.

Cross border renewable projects in Central and Eastern Europe have predominantly occupied the firm in the last 12 months. Practise head Alexander Reuter and partner Kai Kindereit worked alongside the firm's Prague office advising a consortium of banks on the financing a 13.6 MW photovoltaic power plant in the Czech Republic. The project reached financial close in July 2010. More recently, Kindereit and Ralph Busch finalised the financing of two further photovoltaic plants in the country, with a combined capacity of 5.8 MW, in February 2011.

The firm has also been advising a selection of German banks on providing funding for wind farms in Poland, Belgium and Bulgaria. The latter reached financial close with the assistance of Kindereit in December 2010.

On the solar energy side, the firm has been active in Spain, advising Commerzbank and Deutsche Bank separately regarding the financing of two projects. Another European bank has also mandated the firm to advice on the structuring of a potential bond financing for a portfolio of solar parks in Italy

Partner Kindereit has certainly done the miles in the last few months and back in June 2010 he advised a syndicate of development banks regarding the financing for the expansion and modernisation of a hospital in Brazil.

Allen & Overy's two lead project finance partners have separate specialities: Peter Stenz looks after the infrastructure and public-private partnership (PPP) side of things while Norbert Wiederholt handles the energy projects.

Stenz has been recently actively advising on the A8 motorway project between Munich and Augsburg in Bavaria acting for the lenders to a bidder for the project.

Commensurate with the level of activity on the energy side, Wiederholt has also had a busy 12 months, and in a recent deal advised an international bank in connection with the project financing of three solar power installations located in Spain and also an equity investor in connection with the envisaged acquisition and financing of another Spanish solar power project. In Central America, he has been active for a German financial institution in relation to a project financing with Hermes of a power project.

A deal highlight for Hogan Lovells saw the firm advise NRW Bank as part of consortium financing the offshore wind park Borkum West II in the North Sea, the first to be funded via a project financing.

Practice head Ulrich Helm is currently advising on a multi-million power plant project with an alternative fuel vessel and a gas and steam plant in Germany.

Public-private partnership (PPP) projects have made up the bulk of Luther's mandates in the last 12 months.

One deal saw the firm advise the Bundesministerium für Bildung und Forschung (Federal Ministry for Education and Research) on its PPP project to erect a new building at the Kapelle-Ufer in Berlin.

Another matter sees joint practice head Achim Meier advising PTC Euregio a subsidiary of the University Hospital Aachen and the Academisch Ziekenhuis Maastricht in the Netherlands, on the construction of a €350 million particle radiotherapy centre which will also be completed through a PPP project.

In autumn of 2010, the firm was negotiating on behalf of a German-speaking community in Belgium on the tender process for a pilot PPP project for the construction, restoration and modernisation of six schools including financing and operating costs for 25 years.

In project finance work partner Edouard Lange completed a number of notable deals for Paul Hastings. Representing the European Investment Bank (EIB), Lange advised on the project financing of a RDF-fired power plant in Brandenburg.

A further deal saw the Lange act for Heleba in connection with the financing of the construction and operation of a fuel depot at Düsseldorf airport.

Renewables proved a lucrative sector for Watson, Farley & Williams. Partner Thomas Hollenhorst had a deal highlight advising Nord/LB on the financing of the purchase of a part of Germany's fourth largest solar park in Finsterwalde.

Elsewhere, the firm was advising on four off-shore wind farm projects in different capacities on behalf of developers and financiers.