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"The funding problem is affecting project finance, basically there is no money."

As the above quote from one projects partner suggests, the source of the country's problems is simple. Unfortunately finding a solution is much trickier.

"The project finance is mostly difficult, the public sector/infrastructure projects are very depend on that, with the fiscal problems we have had in Portugal, there is a serious reduction on these type of activities," another partner adds.

A lot of projects that had been on the cards have been put on hold indefinitely and with little capital flowing in the market this is unlikely to change any time soon. "The big public infrastructure projects in Portugal, which include the airport, the railway, everything has been suspended," says another partner. "Public investment is gone, with the exception of the ISP railway to Madrid, but that also has a bit of an initial quarrel."

In light of the government's well-publicised budgetary problems and a general lack of liquidity in the banking market, what few projects there are are having to be funded using other forms of finance. Project bonds may well be one solution although this type of work has not really been seen yet. "People are trying to find new investment sources, basically banks have no money. Outside the banking sector, hedge funds and other investors would be alternative investors for this type of financing," says one partner.

PPP (public-private partnership) and PFI (private finance initiative) projects may well be another solution, of sorts, requiring as they do less upfront commitment from the government itself. "We feel that there is something to say in the market, project finance with a lot of investment through PPP and PFI," says another practitioner. "The fact remains that the Portuguese government cannot increase their deficit."

"I've worked with Morais Leitão, my experience with them is very good," says one client. In addition, the firm's flagship project finance lawyer Luís Branco also impressed both his clients and rivals. "I've worked with Luís Branco, he's a very good one, and a very nice lawyer," says one client, while a peer says: "Luís Branco is a very good project finance lawyer and he's very good at project finance."

Though most of the PPP (public-private partnership) projects in Portugal have been suspended due to the economic downturn, Morais Leitão has fortunately managed to maintain a steady stream of mandates. One example saw Branco and Filipe Lowndes Marques lead the team advising on a €600 million PPP financing for a new hospital in the Lisbon area.

Branco was again involved as the team advised Águas de Cascais as concessionaire in the negotiation of the financing, under a project finance regime, of the water and waste concession of Cascais. The mandate was worth €63 million.

Renewable energy is still a key area of activity for most project finance teams with Morais Leitão no exception. February 2011 saw partner Lowndes Marques lead the team advising a syndicate of 11 commercial banks together with bondholders in relation to the repowering of a wind farm held by the Iberwind group, involving the substitution of 20 obsolete turbines with six new generation turbines. The €14 million mandate includes the amendment of the existing facilities, the release of security over the dismantled equipment, as well as the creation of additional security over the new wind turbines.

Another highlight in the renewable energy sector saw Marques lead the team advising Banco Comercial Português in relation to the financing of the construction, installation and operation of a windfarm located in Vila Real, composed of six wind turbines with a global capacity of 15MW. The project, worth €12 billion approximately, was developed by Alto do Marão - Energia Eólica Unipessoal who acted as borrower and was sponsored by Enerflame Investimentos.

There was a feeling in the market that it would be difficult for Uría Menéndez to maintain market position due to the significant loss of a team of lawyers in 2009. On the project finance side, the notable departure was Duarte Brito de Goes, who was believed to be the firm's figurehead on project financing work. "They probably will not have the same scope as before, and the same depth in the project space that they had before," says one peer. "Francisco Sá Carneiro and Duarte Brito de Goes who were responsible for most of the financing work and all of the projects work left and the move will affect Uría." While another also adds: "The firm lost lawyers Francisco Sá Carneiro and Duarte Brito de Goes, who are leading lawyer in project finance. They left to set up their own firm."

In the infrastructure sector, Bernardo Diniz de Ayala, Mafalda Ferreira and Francisco da Cunha Ferreira advised a consortium of banks on the Transmontana motorway concession project located in the north of Portugal, which was valued at €697.4 million.

Elsewhere Antonio Villacampa Serrano, Ferreira and Hélder Frias teamed up to advise borrower Artenius Sines PTA (currently Arlant PTA) on a €371 million financing for the construction, development and operation of a manufacturing plant in Sines, Portugal.

Ferreira was also involved in another €16.5 million infrastructure mandate when he worked alongside Pedro Ferreira Malaquias and Mafalda Almeida Carvalho advising Banco Espírito Santo and Banco Espírito Santo Investimento in relation to their financing agreement with Sadoport - Terminal Marítimo do Sado for the refinancing of the operation of the handling of loads, in the terminal 2 of the Setubal Port.

In light of the Portuguese government's approval of a new management and financial model for the motorway infrastructure sector, a Uría Menéndez team acted for the concessionaire Euroscut – Sociedade Concessionária da SCUT do Algarve in the negotiation with the Portuguese state on the amendments of the concession agreement and other agreements.

Linked in part to its well established and strong banking practice, the project finance team at VdA is well respected within the market and retains its tier one placing this year.

Manuel Protasio is still seen as the firm's key figures and he had a hand in most of the firm's notable mandates last year.

One example saw Protásio and Vanda Cascão lead the team advising Caixa - Banco de Investimento and Caixa Geral de Depósitos on the €300 million financing of a PTA production plant located in Sines Portugal. The plant is owned by Artenius Sines and the construction is on-going since 2008 amounting to an investment of approximately €430 million.

Cuatrecasas Gonçalves Pereira's Portuguese ability is quite exemplary as one client says: "They've got several offices in Portugal with similar capabilities, so I'd say three or four of them are in equal shape." The client admits that all these offices "are very able to provide very good services in terms of project finance" and "they're one of the top firms".

"They've got a good interest in the project, so that the project can go on and surpass whatever difficulties we may find in the way and they don't only speak to the legal aspects in that sense, so they're quite commercial," says one.

Leading the project finance team is partner Diogo Perestrolo who was involved in a string of impressive mandates last year. In the infrastructure sector, the firm has secured a €377 million mandate when Perestrolo worked alongside Rita Roque de Pinho advising the lenders to the Oriental Lisbon hospital PPP (public-private partnership) project. The team was involved in drafting and negotiating the financial documents and reviewing the contracts. This project is part of a wider government programme for the construction and operation of eight new hospitals.

In two other similar transactions, the firm acted on the Algarve Central and Vila Franca de Xira hospitals projects, again advising on the lender side in relation to the hospitals' set up.

De Pinho and Perestrelo are clearly seen as the firm's leading figures and came in for personal praise due to their attention to detail. "They're very good. They seem to always have the first memory of everything that happened in the project; all the documents they've got a very good and interesting perspective and all things interconnected with what is needed in the various documents and contracts," says one client, "they are also very vocal when the client's company is in front of the opposition party. Overall, Cuatrecasas is a good firm."

Another highlight in July 2010 saw Perestrelo involved again advising Euroscut Norte – Sociedade Concessionária da SCUT do Norte Litoral who acted as concessionaire and Vialivre as operator in the negotiation with the Portuguese State, EP – Estradas de Portugal and other financial institutions regarding the transformation of Norte Litoral Shadow toll motorway concession into a toll motorway concession.

Another outstanding mandate involving the firm saw Perestrelo teaming up with Duarte Abecasis advising on the re-opening of the negotiation phase of the international public tender for the high-speed network the Poceirão-Caia stretch. The tender was for the first PPP project launched in Portugal within the high-speed network project, as part of the wider Lisbon-Madrid high-speed link. The Portuguese part of the network was awarded €383 million in funding from the trans-European transport network budget.

In terms of the team's legal knowledge, clients point out that "they've got a good knowledge of the basic concepts involved in the area, they've got a good knowledge of all the fundamental topics involved in the area".

In the renewable energy sector, the duo led the team advising Banif - Banco de Investimento on the cross-border financing of 12 photovoltaic projects located in Spain. In another very similar deal Perestrolo teamed up with Maria João Ricou and Mariana Norton dos Reis advising a Portuguese-based syndicate of banks on the cross-border financing of six photovoltaic projects based in Spain.

Some clients say that the firm's innovation also impressed, even when there didn't seem to be an option to do so. "Whatever it was, they were innovative. I think they're innovative enough to solve whatever problems appear in the project and capable for finding new solutions, so we always found them proactive in finding solutions to accommodate whatever problems appear from the financial aspects," says one client.

Unlike Uría Menéndez, peers suggest that though PLMJ has also suffered some partner deaprtures in the last few years, most notably Maria Castelos, it should maintain its ranking this year on the back of its strong reputation and some notable mandates. In addition, according to peers, the firm has "a very deep capability of retaining clients. They've got good lawyers and they've tried to build up their finance department. So I would say that though they may have faced some losses in this sector, they'll go through," says one peer and another agrees: "PLMJ is a very big firm. I think internal arrangements can adjust to Maria's departure. Castelos is a very good lawyer in project finance, and I've lots of respect for her."

One substantial transaction, closed in June 2010, saw Inês Pinto da Costa and Carolina Santos Costa lead the team advising Ventos Propicios - Energia Eolica on a €30 million financing of the construction of a wind farm located in Portugal.

Another highlight saw Da Costa, Jorge Brito Pereira, Sílvia Espirito Santo and Bruno Xavier de Pina work together advising Nova Cimangola on the financing of the construction of a cement production line. It is believed to be one of the first project finance mandates entering Angola.

Garrigues' corporate team is substantial, but some in the market point out that this can lead to differing levels of quality.

One of the biggest mandates completed last year saw Mário Lino Dias advise SOS Corporación on the sale of its 19 Portuguese companies holding 5433 acres of Olive land to the Elaia Group for €91 million.

An on-going mandate at Abreu Advogados last year saw a team led by partners Miguel Castro Pereira and Duarte de Athayde advise Patriram, the asset manager of the Government of the Autonomous Region of Madeira, on the incorporation of real estate funds for the asset management and on funding matters connected with the optimisation of the Madeira real estate assets.

The team also acted for the municipality of Alcácer do Sal on the preparation of a land management plan in regard to the establishment of a studio for painter Anselm Kiefer. This was valued at €100 million.

In an approximately €4.5 billion mandate, Gustavo Ordonhas Oliveira at Sociedade Rebelo de Sousa led a team advised ENI on the potential sale of its 33.34% shareholding in Galp Energia to Petrobras. The team advised ENI on all legal aspects of its shareholding in Galp Energia and relationships with other reference shareholders under the existing shareholders agreement since 2004.

Another notable transaction saw William Smithson and Gonçalo dos Reis Martins teaming up to advise TPG-Axon Capital, a US private equity fund, on the acquisition of a 5% of the share capital of Portugal Telecom and related derivatives structure, valued at €360 million.

Sérvulo & Associados has been recognised as “a strong public law firm” by its peers. “Servulo is a very nice firm, very professional, especially in assisting the Portuguese government doing a lot of PPP (public-private partnership) projects," says one rival.

Road projects were a clear focus for the team last year. One substantial mandate saw Mark Kirkby lead the team advising on the conversion of shadow toll motorway concessions into real toll motorway concessions, which involved negotiations with three new concessions, including Eurocut Algarve, Scutvias Beira Interior and Norscut Interior Norte. The mandate was worth €3 billion.

Another highlight, valued at €800 million, saw Lino Torgal advise Ascendi, who act as the sponsor advising Pinhal Interior motorway sub-concession on the respects of financing, building and operation of the highway.

Due to peers and clients' recommendations, Campos Ferreira Sá Carneiro & Associados has been ranked in the project finance table for the first time after its establishment. “The new firm missing here is Campos Ferreira and it should be ranked on the table,” says one peer and a client agrees: “I've worked with Campos Ferreira and my experience [with the firm] is very good.” The client then went on to comment on one of the firm's partner: “Duarte Brito de Goes is an excellent lawyer, everything you can imagine, he delivers.”

One highlight last year saw partner Brito de Goes act for a syndicate of banks, including Banco Comercial Português, Caixa Geral de Depósitos and Banco Espírito Santo, on the €800 million reform of the tender procedure and concession contract for the Poceirão-Caia stretch of the high speed rail network. The team advised on the review of the financial structure of the project and amendment to the financial documents.

Brito de Goes was involved again on another occasion when he led the team advising Caixa Geral de Depósitos and Caixa – Banco de Investimento on the refinancing of the concession for municipal public service to supply water in the municipalities of Santo Tirso and Trofa.