LEGAL REPORT Americas 54 Asia Pacific 56 EMEA. 46 Global review 47 League tables 49 Project list IN THIS SECTION

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1 LEGAL REPORT 2011 IN THIS SECTION 46 Global review 47 League tables 49 Project list 52 Americas 54 Asia Pacific 56 EMEA

2 INTRODUCTION LEGAL UPS AND DOWNS ALLEN & OVERY HAS MAINTAINED ITS POSITION AT THE TOP OF PROJECT FINANCE INTERNATIONAL S 2011 LEGAL SURVEY CLOSELY FOLLOWED BY MILBANK TWEED, WHILE OTHER LAW FIRMS HAVE MOVED UP AND DOWN THE LADDER. BY SPRIHA SRIVASTAVA. Following Allen & Overy in first place, Milbank Tweed moves up from its fifth position last year to the second spot this year as Clifford Chance slips to fifth. White & Case and Latham & Watkins broke their tie for the third spot from last year with W&C moving up to the third spot. Latham & Watkins slips from the third spot last year to fourth. A&O s total of 21 deals has continued to put it in the first spot while Milbank Tweed s tabletopping total of 19 deals this year is a significant boost from the 11 last year. White & Case has also increased the number of deals this year to 17 from 12 last year. Surprisingly, Clifford Chance, which maintained its position in second place last year with 15 deals in its basket has slipped to fifth position this year with 12 deals. All of the firms towards the top of the table enjoyed a somewhat happier time from October 2010 to September 2011, with the top six Linklaters in the sixth position managing 95 mandates between them, compared with 80 mandates last year. While A&O has taken the top spot, the eurozone sovereign debt crisis continues to affect the banking market and the project finance space. Within Europe, one can see that the loan market has definitely been negatively affected, but leading legal players are of the opinion that the project finance market has still held up. Markets in the Middle East are still quite active and in Africa, too, there is a lot of activity in the mining and oil and gas sectors. However, the suppressed market continues to provide a little more volatility than it did in the boom years. For example, firms in the top three managed 57 deals this year while the following five managed 58 deals. Three to four years back the top three managed 73 deals, as per the results. As ever, to head the global standings has required a strong performance in each region. Allen & Overy continued to top the EMEA table with 14 deals in that region. It had a further five deals in Americas and two in Asia-Pacific, gaining it fourth and ninth positions respectively compared with second and third positions last year. It took a sponsor-side role in the biggest project of the year, the US$9.1bn Tours-Bordeaux High Speed Rail project in France. Milbank Tweed was led by its strong performance in the Americas, where it moved up from fourth spot last year to the top spot this year. With 15 deals in the Americas region, two deals in Asia-Pacific and two in EMEA, Milbank Tweed moved up dramatically from fifth last year to second this year. The firm was involved in the sponsor role for the US$3.7bn Hongsa Mine-Mouth project in Laos and the US$2.5bn Jurong Aromatics Complex project in Singapore, among many others. White & Case maintained its third position but increased the number of deals from 12 last year to 17 this year. The firm had a total of eight deals in EMEA, six in the Americas and three in Asia- Pacific. W&C took the lender-side role for the biggest project of the year, the US$9.1bn Tours to Bordeaux High Speed Rail project in France. It also took the sponsor-side role in the US$3.5bn Nord Stream Phase 2 project in Russia. Each year, PFI conducts a survey of the legal practices working on the primary (and secondary) roles in the previous year s headline deals. These are defined as projects valued at more than US$500m, although issues such as currency exchange and deal complexities can affect things. Of course, lawyers operate in a very different way to bankers - fees are often billed by the hour and are unrelated to margins - and the value of the deal does not always correlate with the volume or complexity of deals in a firm s portfolio. But the US$500m floor acts as an effective snapshot, in terms of measuring both significant domestic project financings and international deals. To be included in the tables the projects need to have closed between October 2010 and September This year s list reveals just how busy the projects markets was from October 2010 onwards. Of course the events in the eurozone during the summer could well slow things up for 2011/12 but the international projects market remains good legal business. While A&O has taken the top spot the eurozone sovereign debt crisis continues to affect the banking market and the project finance space. 46 Project Finance International November

3 LEGAL SURVEY GLOBAL - SEPT 2010 TO SEPT 2011 Law firm Lender Sponsor Total Allen & Overy Milbank Tweed White & Case Amarchand Mangaldas Latham & Watkins Clifford Chance Linklaters Norton Rose Freehills Allens Arthur Robinson Jones Day Stikeman Elliot Shearman & Sterling Freshfields Blake Dawson Chadbourne & Parke McMillan Mayer Brown Watson Farley Luthra & Luthra Cuatrecasas Gonçalves Pereira Morrison & Foerster Souza, Cescon, Barrieu & Flesch Simpson Thacher & Bartlett Berwin Leighton Paisner Mallesons Stephen Jaques Corrs Chambers Westgarth Herbert Smith Chiomenti Studio Legale Cleary Gottlieb Steen & Hamilton Baker & McKenzie Ashurst AZB GLOBAL - SEPT 2010 TO SEPT 2011 CONTINUED Law firm Lender Sponsor Total DLA Piper Blakes Mattos Filho Veiga Filho Marrey Jr Hogan Lovells Akin, Gump, Hauer & Feld Skadden Basch & Rameh King & Spalding Cadwalader Wicherham & Taft SJ Law Advocates & Solicitors Manuela Anotnio Law Office India Law Services Khaitan Sud & Partners Anderson, Mori & Tomotsune YKVN Lee & Lee Rajah & Tann Phoenix Legal AZB & Partners Link-Legal Gilbert & Tobin Slaughter & May Loyens & Loeff Gleiss Lutz Gide Loyrette Nouel Gorg Rechtsanwalte Plesner Salans Orrick Rambuad Martel Gianni, Origiani, Grippo & Partners Legance Uria Menendez Project Finance International November

4 LEGAL SURVEY AMERICAS - SEPT 2010 TO SEPT 2011 Law firm Lender Sponsor Total Milbank Tweed Latham & Watkins White & Case Allen & Overy Stikeman Elliot Norton Rose Chadbourne & Parke McMillan Mayer Brown Clifford Chance Morrison & Foerster Souza, Cescon, Barrieu & Flesch Simpson Thacher & Bartlett Shearman & Sterling DLA Piper Ashurst Blakes Mattos Filho Veiga Filho Marrey Jr Hogan Lovells Freshfields Akin, Gump, Hauer & Feld Skadden Basch & Rameh Freehills Watson Farley Jones Day King & Spalding Cadwalader Wicherham & Taft Berwin Leighton Paisner ASIA PACIFIC - SEPT 2010 TO SEPT 2011 Law firm Lender Sponsor Total Amarchand Mangaldas Allens Arthur Robinson Freehills Blake Dawson 4 4 Latham & Watkins White & Case Luthra & Luthra Mallesons Stephen Jaques Allen & Overy Norton Rose Corrs Chambers Westgarth Milbank Tweed AZB SJ Law Advocates & Solicitors Manuela Anotnio Law Office India Law Services Khaitan Sud & Partners Anderson, Mori & Tomotsune YKVN Freshfields Shearman & Sterling Lee & Lee Rajah & Tann Phoenix Legal AZB & Partners Link-Legal Gilbert & Tobin Baker & McKenzie Linklaters EMEA - SEPT 2010 TO SEPT 2011 Law firm Lender Sponsor Total Allen & Overy Linklaters Clifford Chance White & Case Norton Rose Jones Day Latham & Watkins Cuatrecasas Gonçalves Pereira Milbank Tweed Watson Farley & Williams Herbert Smith Freshfields Chiomenti Studio Legale Cleary Gottlieb Steen & Hamilton Baker & McKenzie Shearman & Sterling Slaughter & May Loyens & Loeff Gleiss Lutz Gide Loyrette Nouel Ashurst Gorg Rechtsanwalte Plesner Salans Orrick Rambuad Martel Gianni, Origiani, Grippo & Partners Legance Berwin Leighton Paisner Uria Menendez Project Finance International November

5 LEGAL SURVEY PROJECT LIST SEPT 2010 TO SEPT 2011 Project Country Value (US$m) Lenders Sponsors Subsidiary roles Sector Tours-Bordeaux High Speed France 9, White & Case Allen & Overy Hogan Lovells, Transportation Rail PPP Linklaters Ma'aden Phosphate Company Saudi Arabia 7, Baker & McKenzie Shearman & Sterling Mining Lanjigarh Alumina Refinery India 6, SJ Law Advocates & Solicitors Luthra & Luthra Law Offices Industry and Jharsuguda Power Plant City of Dreams Casino Macau 4, Allens Arthur Robinson Corrs Chambers Westgarth, Leisure and property Manuela Antonio Law Office Hyderabad Metro Rail India 3, Amarchand Mangaldas India Law Services Transportation Hongsa Mine-Mouth Lao 3, Latham & Watkins Milbank Tweed Power Nord Stream Phase 2 Russian Federation 3, Clifford Chance, White & Case Oil and gas HSBC Eversholt Rail United Kingdom 3, Allen & Overy Linklaters Transportation Wiggins Island Coal Export Australia 3, Allens Arthur Robinson Blake Dawson Mining Terminal New Royal Adelaide Hospital Australia 2, Allens Arthur Robinson Freehills Industry Newcastle Third Coal Loader Australia 2, Allens Arthur Robinson Blake Dawson Clayton Utz Mining Expansion - Stage 2F Gatwick Airport Refinancing United Kingdom 2, Allen & Overy Slaughter & May Freshfields, Hogan Lovells Airport Lalitpur Supercritical India 2, Khaitan Sud & Partners, In-House legal team of Power Coal-fired Power Solicitors & Advocates Bajaj Group Global Tech North 1 North Sea Germany 2, Watson Farley CMS Hasche Sigle Allen & Overy Power Windfarm Jurong Aromatics Singapore 2, Milbank Tweed Latham & Watkins Allen & Overy, Hogan Lovells Petrochem High Speed 1 United Kingdom 2, Allen & Overy Linklaters Herbert Smith, Freshfields Transportation Port of Brisbane Sale Australia 2, Mallesons Stephen Jaques Allens Arthur Robinson Minter Ellison Transportation Centre Hospitalier de Canada 2, Blakes Stikeman Elliott PPP l' Universite de Montreal Shepherds Flat Wind Farm United States 2, Milbank Tweed Chadbourne & Parke Clifford Chance Power eaccess Mobile Broadband Japan 2, White & Case Anderson Mori & Tomotsune Telecoms Network Loan Refinancing Jubilee Kosmos Ghana 2, Linklaters Clifford Chance Oil and gas Norton Rose Caserones Copper and Chile 2, Milbank Tweed Morrison & Foerster Mining Molybdenum Mine Abott Point Coal Terminal North Queensland 2, Allen & Overy, Amarchand Economic Laws Practics Allens Arthur Robinson Transportation Mangaldas, Corrs Chambers Westgarth Nizhnekamsk Russian Federation 2, Allen & Overy Cleary Gottlieb Steen Petrochemicals & Hamilton Mong Duong Coal-Fired Vietnam 1, Latham & Watkins, YKVN Freshfields, Shearman Power Thermal Power Plant & Sterling Iridium Satellite United States 1, Allen & Overy Milbank Tweed Telecoms Mobil Producing Nigeria Nigeria 1, Milbank Tweed Latham & Watkins Oil and gas Thornton Bank Offshore Wind Belgium 1, Loyens & Loeff, Watson Farley Allen & Overy Power Meerwind Offshore Wind Germany 1, Watson Farley & Williams Gleiss Lutz Power Windsor-Essex Parkway Canada 1, McMillan Stikeman Elliott Transportation Kawai Coal Linkage-based Power India 1, Amarchand Mangaldas Power A63 Toll Road Scheme France 1, White & Case Gide Loyrette Nouel Clifford Chance Transportation Termosolar Nextera Spain 1, Jones Day Power Extremadura I and II Shuweihat III IPP Abu Dhabi 1, Ashurst Herbert Smith White & Case Power Amravati India 1,384.0 Amarchand Mangaldas Power Nasik India 1,357.0 Amarchand Mangaldas Power Cidade de Paraty FPSO Brazil 1, Norton Rose Berwin Leighton Paisner Oil and gas Odebrecht ODN I & ODN II Brazil 1, White & Case Mayer Brown, Souza, Oil and gas Cescon, Barrieu & Flesch Endesa Gas Spain 1, Allen & Overy Linklaters Oil and gas Rus Vynil Russian Federation 1, Linklaters White & Case Petrochemicals Forth Ports Balmoral United Kingdom 1, Clifford Chance Linklaters Transportation Oakville Hospital Replacement Canada 1, Stikeman Elliott McMillan PPP El Palito Refinery Expansion Venezuela 1, DLA Piper Milbank Tweed Arnold & Porter Oil and gas Xingu and Macapa Transmission Brazil 1, Mattos Filho Veiga Filho Power Lines Marrey Jr Project Finance International November

6 LEGAL SURVEY PROJECT LIST SEPT 2010 TO SEPT 2011 CONTINUED Project Country Value (US$m) Lenders Sponsors Subsidiary roles Sector Dahej CCGT India 1, Amarchand Mangaldas Power Jurong Island CCGT Singapore 1, Norton Rose, Lee & Lee White & Case, Rajah & Tann Power Genesis Solar Energy United States 1, Hogan Lovells Chadbourne & Parke Clifford Chance Power Pipavav India 1, Amarchand Mangaldas AZB Power PR 22 Puerto Rico 1, Milbank Tweed Freshfields Allen & Overy, Pietrantoni Roads Mendez & Alvarez O3b Networks Satellite South Africa 1, Allen & Overy Milbank Tweed White & Case, Allen & Overy Telecomunications Mitsui and Tokyo Gas Mexico 1, Allen & Overy Morrison Foerster Power Petronet LNG Refinancing India 1, Amarchand Mangaldas Phoenix Legal Linklaters Oil and gas Borkum West II Offshore Germany 1, Linklaters Gorg Rechtsanwalte Hogan Lovells, Linklaters, Power Windfarm Allen & Overy Guara FPSO Brazil 1, Norton Rose Ashurst Oil and gas Sentinel Energy United States 1, Milbank Tweed Latham & Watkins Akin Gump Strauss Hauer & Feld Power Aries Solar Termoelectrica SL Spain 1, Jones Day, Cuatrecasas Linklaters Power Gonçalves Pereira Macarthur Windfarm Australia 1, Freehills Allens Arthur Robinson Clayton Utz Power Barcelona Metro Line 9 Spain 1, Cuatrecasas Gonçalves Pereira Clifford Chance Transportation Stretch II Train Station Tehsil Jaithari Power Plant India 1, AZB & Partners Link-Legal Power Sharylands United States 1, Mayer Brown Simpson Thacher & Bartlett Power Copenhagen Airport Denmark Allen & Overy, Plesner Clifford Chance Airport Gebze Gas Fired IPP Turkey 1, White & Case Clifford Chance Power Yuzhno-Russkoye deal Russian Fed 1, Linklaters Herbert Smith Oil and gas The Dow Chemical Company Thailand 1, Baker & McKenzie Linklaters Petrochemicals Enerjisa Stage 2 Turkey Clifford Chance White & Case Power LEAP Phase 2 PPP Australia Freehills Allens Arthur Robinson Clayton Utz PPP Malaga Guadiaro Toll Spain Freshfields Allen & Overy Transportation Dow Mitsui Chlor-Alkali Plant United States Akin Gump Strauss Hauer Fulbright & Jaworski Petrochemicals & Feld Brasil Terminal Portuario Brazil Clifford Chance Transportation A15 Maasvlakte-Vaanpien Road Netherlands Norton Rose Allen & Overy NautaDutilh Roads Petroserv Drillship Brazil Allen & Overy Oil and gas Pentagon a la francaise France Salans Jones Day, Orrick Rambuad Hogan Lovells PPP Martel Hudson Transmission Line United States Milbank Tweed Skadden Power HPCL-Mittal Crude oil pipeline India Amarchand Mangaldas Luthra & Luthra Law Offices Oil and gas refinancing Russell City Energy Center United States Latham & Watkins White & Case Power DB Power Phase 1 India Amarchand Mangaldas Power El Boleo Mexico Mayer Brown Allen & Overy Mining Rete Rinnovabile PV Portfolio Italy Gianni, Origiani, Grippo Chiomenti Studio Legale Linklaters, Freehills Power & Partners DP World Australia Port Australia Mallesons Stephen Jaques Blake Dawson Mallesons, Slaughter & May, Transportation Hogan Lovells Milford Acquisition United States Milbank Tweed Latham & Watkins Power Alpha Star Rig Brazil White & Case, Norton Rose Basch & Rameh Appleby, Patton Moreno Oil and gas & Asvat A24/25 Strada dei Parchi Italy Legance Chiomenti Studio Legale Transportation Bhavnagar India Amarchand Mangaldas Power Spinifex Ridge Molybdenum/ Australia Norton Rose Freehills Mining Copper Masdar Solar Scheme Shams 1 Utd Arab Em White & Case Allen & Overy, Linklaters Power FPSO Aseng Equator Guinea Norton Rose Berwin Leighton Paisner Oil and gas Baradarha Coal-based India Luthra & Luthra Law Offices Power Subcritical Thermal Power Texas Wind Energy United States Milbank Tweed Latham & Watkins Power Transmission Arcelor Mittal Saudi Arabia Allen & Overy Latham & Watkins, Steel Mill Norton Rose Hills M2 Motorway Upgrade Australia Allens Arthur Robinson Freehills Clayton Utz Transportation MCV Refinancing United States Latham & Watkins Shearman & Sterling Power Carolina Marine Deepwater Brazil Allen & Overy, Clifford Chance Freehills, Watson Farley Oil and gas 50 Project Finance International November

7 LEGAL SURVEY PROJECT LIST SEPT 2010 TO SEPT 2011 CONTINUED Project Country Value (US$m) Lenders Sponsors Subsidiary roles Sector A8 Germany CMS Hasche Sigle Freshfields Norton Rose Transportation Thamminapatnam Coastal India Dua & Associates Power Thermal Power Plant Phase 2 El Segundo Generating United States White & Case Jones Day Power Station Expansion QGOG Atlantic & Alaskan Brazil White & Case/Souza, Cescon, Milbank Tweed Oil and gas Rigs Refinancing Barrieu and Flesch Mirant Marsh Landing United States Milbank Tweed King & Spalding Power Eshidya Ma'an Phosphoric Jordan White & Case Allen & Overy Petrochemicals Acid Plant DB Power 1200MW India Amarchand Mangaldas Power Phase II Power Midland Cogeneration United States Latham & Watkins, Power Gas-Fired Power Plant Shearman & Sterling Bayonne Power Plant United States Milbank Tweed White & Case Power Newcastle Third Coal Australia Allen & Overy, Freehills Blake Dawson Clayton Utz Mining Alta Wind VI & Alta Wind VIII United States Simpson Thacher & Bartlett Latham & Watkins Akin Gump Strauss Hauer Power & Feld Arenales Solar Spain Cuatrecasas Gonçalves Pereira Power Sistema Shyam MTS Telecom India Amarchand Mangaldas Telecommunications Rollout Walnut Creek Gas-Fired United States Chadbourne & Parke Latham & Watkins Power Africana Energia Thermoelectric Spain Jones Day Power Cilindro Parabolica Thyssengas Gas Network Sale Germany Clifford Chance Linklaters Oil and gas Surana Raichur Thermal India Amarchand Mangaldas Power Power Plant North Queensland Australia Freehills Gilbert & Tobin Transportation Airports refinancing St. Joseph's Regional Canada Stikeman Elliott McMillan Leisure and property Health Care EquiPower Resources United States Milbank Tweed Latham & Watkins Power Power Portfolio M1 Eastern Distributor Australia Freehills Allens Arthur Robinson Transportation Refinancing 3 Nueva Madrilena Red de Gas Spain Clifford Chance Uria Menendez Oil and gas Pipeline Acquisition Mundra Thermal Power India White & Case, Amarchand Power Phase 3 Additional Financing Mangaldas Gainesville Biomass United States Milbank Tweed Cadwalader, Wickerham & Taft Power Idaho Wind Farm Portfolio - United States Milbank Tweed Clifford Chance Power Phase 1 Financing Tonkolili Iron Ore Sierra Leone Latham & Watkins, Cleary Mining Gottlieb Steen & Hamilton Project Finance International November

8 FEATURES KEEPING BUSY IN THE AMERICAS GIANT HOSPITAL FINANCINGS IN CANADA AND DEPARTMENT OF ENERGY LOAN GUARANTEE-BACKED POWER DEALS HAVE KEPT LAW FIRMS BUSY IN NORTH AMERICA. IN LATIN AMERICA, THE YEAR HAD BEATEN EXPECTATIONS BEFORE THE RECENT PULLBACK. BY ALISON HEALEY AND ALAN GERSTEN. North America legal rankings include players such as Stikeman Elliott and McMillan that have made major strides based on public-private partnerships finally getting to financing stage. In the US, it has been power financings backed by DOE guarantee programmes for renewables as well as large power transmission financings that have made the most formidable impact on the rankings, with deals such as the US$2.1bn Shepherds Flat and the US$1.2bn Genesis Solar. Chadbourne & Parke represented the sponsors of both projects, while Milbank acted for lenders on Shepherds and Hogan Lovells represented lenders on Genesis. Transmission deals have also provided a major source of deal flow with large transactions in the US$1.03bn Sharyland Transmission, on which Mayer Brown represented lenders and Simpson Thatcher & Bartlett acted for the sponsors, and Hudson Transmission, which used Milbank for the lenders and Skadden for the sponsors. In terms of major shake-ups at firms, one of the top stories was the mass exodus of the renewables team from Chadbourne to Akin Gump. In May, a team of 16 renewables attorneys from Chadbourne & Parke joined Akin Gump Strauss Hauer & Feld in Los Angeles following Edward Zaelke and Adam Umanoff s move to the firm as partners. Umanoff and Zaelke now serve as cochairs of the firm s global project finance practice. The new partners were initially joined by Thomas Dupuis and Lloyd MacNeil, who also worked in project finance and renewables at Chadbourne. A few days after that announcement, Akin Gump announced that Kerin Cantwell and Daniel Sinaiko had also joined the firm s project finance and renewable energy practice as partners in Los Angeles, joined by five counsel and five associates. Within the past year, that team had been involved in renewable energy transactions including representing Caithness Energy and GE Energy Financial Services in the development and US$2bn financing of the Shepherds Flat wind farm; representing Western Wind Energy Corporation on more than US$350m in financings for wind projects and on combined wind and solar projects in California and Arizona; representing Terra-Gen Power in the development and more than US$1.5bn financing of 720MW of wind energy projects at its Alta Wind Energy Center in California; and representing BrightSource Energy in the development and more than US$2bn financing of the Ivanpah solar electricity generating system. In September, Akin Gump further expanded its project finance and renewable energy capabilities with the addition of partners Thomas Trimble and Jeremy Schwer, who rejoined the firm s Washington DC, office from Hunton Williams, where both were partners. Enid Veron s move to Greenberg Traurig marked the start of a concerted effort to get the firm recognised for its project finance work that had been largely under the radar. Veron joined the firm s New York City and Washington, DC offices as a shareholder in the energy and natural resources practice as the firm worked to grow its energy and project finance capabilities in New York. Previously, Veron had been a partner at Skadden Arps and most recently at Hunton & Williams. Nossaman has added a few key players as the firm continues its advisory work in US publicprivate partnerships, working on the Scudder Falls transaction in particular as well as advising Washington state on potential P3s. Yukiko Kojima and Peter Denton joined Nossaman its infrastructure practice group, Kojima as a partner and Denton as an associate attorney, both from Davis. Kojima joined Nossaman from Davis s Tokyo office and is based in Los Angeles. His experience included working on deals such as the C$2bn Canada Line rapid transit project as well as the C$90m Surrey Pretrial Services Centre Expansion project in British Columbia and C$247m Quinte Consolidated Courthouse Project in Ontario, both of which reached financial close in June Veteran transportation lawyer Kevin Sheys also joined Nossaman as a partner in its infrastructure practice group from K&L Gates. In terms of shake-ups at firms, one of the top stories was the mass exodus of the renewables team from Chadbourne & Parke to Akin Gump. 52 Project Finance International November

9 AMERICAS In Canada, Stikeman Elliott made a major showing by representing lenders on both the C$2.1bn CHUM hospital and C$1.2bn Oakville hospitals projects. McMillan made a dent by participating on the other side of both transactions, representing the sponsors. The roles were reversed on another major Canadian infrastructure project, the C$1.2bn Windsor-Essex Parkway transaction. In Latin America, Brazil remains the economic powerhouse, attracting law firms and lawyers, while other countries hold promise as well. We had many transactions, and other projects progressed and were completed, beating everyone s expectations, said Carlos Albarracín, a partner at Chadbourne & Parke, an international law firm based in New York. However, Albarracín said a slowdown had overtaken the market in the past two months because of Greece s financial problems, which could affect French and Spanish banks. These are heavy lenders in Latin America, so that could affect the business of US and other international law firms in Latin America. The key is the types of projects, said Dan Bartfeld, a partner in the global project finance group at Milbank Tweed, an international law firm based in New York. Transportation infrastructure is going to be very active in Brazil, with [developments] like airports, seaports, rails and logistics because of the Olympics and World Cup. They have to figure out ways of getting natural resources out of the country, Bartfeld said. In Brazil, there are a lot of offshore projects, such as drill ships, while Mexico has several pipeline projects. For Bartfeld, a big problem is the lack of capital. European banks will have capital constraints because of their heavy exposure to Greece. To fill the breach, Japanese banks are moving in, Bartfeld said. The Japanese companies are very, very strong. Besides that, Latin America will look to export credit agencies and multilaterals for capital. Bartfeld predicted multisource financing for projects in the future. Also, there will be bigger opportunities for [South] Korean banks and the Korea Ex-Im Bank, and Chinese banks will be more in the picture, Albarracín said. Chinese banks use English law, better positioning British law firms in Latin America, but US firms such as Chadbourne have a strong relationship with bilateral and multilaterals. Thus, a variety of international law firms see promise in Latin America. Basel III, which imposes capital constraints, may make project bonds more attractive than loans, Albarracín said. All of this provides opportunities for US and other international law firms. In November, for instance, K&L Gates opened a law office in São Paulo, the firm s first in South America It s become a measure of the quality of service that law firms can provide to Brazilian clients to have those services locally, said Marc J Veilleux, a partner in the São Paulo office of the New Yorkbased firm. We have worked with many industrial and financial services companies for many years, and it s important to have a local presence. But non-brazilian firms have limits. The Brazilian Bar Association grants US and other international law firms the right to represent local clients in international transactions, but not locally. For example, a US law firm cannot represent Petrobras in raising funds in Brazil, but it can do so in the US, Europe or Asia. Thus, K&L Gates São Paulo office is licensed as a foreign legal consultancy, as required by the Brazilian Bar Association (OAB). Since so many Brazilian clients, like Petrobras, are becoming multinationals, there is a big opportunity for international law firms in Brazil. Brazilian multinationals are growing in oil and gas, financial services, mining, food services and petrochemicals. Despite the world s sluggish economy, Brazil did well last year and is projected to do the same in That keeps attracting international law firms. Countries other than Brazil also offer opportunities for US and international law firms, said Claudette M Christian, partner and co-chair of Hogan Lovells, a Washington-based international law firm. The climate [in Latin America] is very strong, she said. Specifically, Christian mentioned opportunities in Brazil, Colombia, Peru and parts of Ecuador. Also, I m interested in the recent election in Argentina. The economy became stronger, and I expect more cross-border activity. The Latin American countries are so strong because a lot of them are resource-based, Christian said. There s oil, minerals, chemicals, among others resources. The companies doing business in Latin American want resources, she said. That promotes transactions. Another reason for the region s popularity is that these [Latin American] economies are maturing. We ve waited a long time, and it s good to see, Christian said. In turn, that means more work for US and other international law firms. If a Brazilian multinational cannot go to its normal European sources, it may need an international law firm to help in getting new funding from new sources. Overall, US law firms are moving cautiously into Latin America. Hindered by local operating rules, such as those in Brazil, the US law firms are slowly opening offices in places such as Sao Paulo. Hogan Lovells has an office in Caracas. When asked how the firm could survive there with Hugo Chavez as president, co-chair Christian said: We re apolitical. While other countries offer possibilities for international law firms, Brazil remains the leader because of its economic strength. Through the growth of diversification of its robust economy, Brazil has been propelled to the forefront of the 21st century marketplace for legal services, said Peter J Kalis, K&L Gates chairman and global managing partner. Project Finance International November

10 FEATURES GOING STRONG AND STEADY IN AP IN A YEAR THAT CONTINUES TO BE FILLED WITH UNCERTAINTIES AND INSTABILITY, THE ASIA-PACIFIC REGION REMAINS STEADY AND SO FAR RELATIVELY UNSCATHED BY THE CRISIS THAT IS BREWING IN OTHER PARTS OF THE WORLD. BY MINERVA LAU AND JOHN ARBOUW. Government debt troubles elsewhere in the world do not seem to end, but those in the Asia- Pacific region have systems that are now better prepared for this, as they had their taste of problems during the late 1990s crisis. The region has continued to register healthy growth in PF activities, especially in the first half of the year. India again is the busiest and so comes as no surprise that Indian law firms are leading the legal league tables. Amarchand Mangaldas is at the top and other Indian law firms are not very far behind. Most of the legal advisory work is for financial institutions, as a majority of project developers have in-house counsel. But concerns and issues in India s lending sector, particularly in the power segment, are surfacing and are causing a slowdown in activities. One partner at Amarchand Mangaldas noted while the firm has been quite busy, there has been less deal flow in the second half of the year. In addition to the perennial land acquisition issue, higher coal prices and rising interest rates are keeping developers at bay, and putting their projects on hold. Reliance Power, for example, is understood to have put its Rs174bn 6x660MW Krishnapatnam UMPP project on the back-burner, largely due to the higher cost of coal, which is imported from Indonesia. There are talks between power plant developers and the government on possibly amending the PPAs such that the increase in fuel cost could be passed through to the customers. Financing of some Rs131bn of debt for Krisnapatnam UMPP was put in place in 2010 and it is not clear how much of this has been disbursed, if any. The loan s interest rate is reviewed annually and as base rates have risen substantially over the past 20 months (they are now between 13% and 14% this year, compared with 10% to 11% last year), funding has also become more expensive. This is the second UMPP of three that RPower has bagged. With a number of Indian power plant developers involved in the talks, law firms could be busy. At the same time, there is growing activity in the transport sector and that adds to a demanding year for the domestic legal fraternity in the country. The year has also seen international law firms beefing up the number of their oil and gas experts as there is a growing pipeline of projects in that sector FPSOs, LNG terminals and E&P activities. Rising oil prices are definitely a major incentive for oil majors to push on with investment plans. Norton Rose, for example, has moved Alex Cull from the firm s Singapore office to Perth as a partner in its Australian practice. Cull is a leading oil and gas expert in the Asia-Pacific and has worked in the region for more than 12 years. Meanwhile, the firm s Singapore office has been joined by Ashley Wright, who is also known for his expertise in the oil and gas industry. One recent addition to the region s legal community is Wikborg Rein, a leading law firm from Norway. It set up a project finance team headed by Kelly Malone in Singapore in August. According to Malone, many activities will be driven by oil and gas projects, as well as renewables, especially with feed-in tariffs (FITs) being finalised, or soon to be finalised, by different governments in the region. Pakistan has just announced attractive feed-in tariffs and may soon see serious investor interest. Many are also waiting for the Philippines to announce its FIT for renewables, which is now in the consultation stage. This year, there seem to have been fewer movements among lawyers but expansion has been visible. Hogan Lovells, for example, has added two associates to its Ulaanbaatar office in Mongolia to focus on infrastructure and mining sectors in the country. Mongolia is one place where interest in growing. The firm has also added an associate in Singapore and strengthened its Hanoi office with the move of Stanley Boots (Of Counsel). PPPs, infrastructure and power will remain key focuses of James Harris s team. Marsh is another firm that sees the potential in the region. It has formed a new global power practice in Singapore headed by Philippe Du Four, who was the head of power and the utility sector of the firm s infrastructure practice in Asia. Indonesia remains the main source of activity for law firms in South-East Asia. While many international law firms have already local associations in place, Norton Rose and O Melveny 54 Project Finance International November

11 ASIA PACIFIC & Myers have both announced new associated firms in the country, whose power sector will continue to keep lawyers busy. The Australian economy has seen a boom year in 2011 and Australian and international law firms are sharing in the bounty of legal advisory business, benefiting from deals in the resources, infrastructure and PPP sectors. While mining deals have been proliferate, with companies either securing new finance, equity, new partners or simply refinancing, the infrastructure and PPP sector as well as state government privatisation have been growing sources of business. The resources sector has been predictably buoyant, with Chinese and Indian companies moving into the iron ore and coal sectors not only for offtake deals but also in outright takeovers of existing operations. This type of international activity on Australian soil has also seen international law firms become far more active locally in either setting up their own offices or making merger deals with established firms. Norton Rose and Deacons have been operating for the past two years, Allen & Overy plundered Clayton Utz and took 14 partners, including its project finance team, and DLA Piper has affiliated with Phillips Fox and set up this year. Speculation is also rife that Clifford Chance is talking to Mallesons Stephen Jacques and that Freehills is also in discussions with an international partner. The biggest deal this year was the Asia-Pacific merger between Ashurst and Blake Dawson. Ashurst is keen to leverage Blake s Asia Pacific connections to expand its business and a full merger between the firms is likely next year. The benefits have become obvious and attractive. Deacons was a respectable mid-tier firm but its profit per partner has now grown exponentially thanks to the Norton Rose connection. The new entrant is Squire Sanders, which has set up shop in Perth and is trying to finalise a merger or co-operative arrangement with Minter Ellison. According to Allen Arthur Robinson partner Phillip Cornwell, the entry of UK law firms hasn t impacted on the deal flow for local firms except in the LNG area, where international sponsors give the main legal mandates to their usual law firms and only use Australian firms for secondary work. Cornwell says that despite the LNG situation, Australia has been the home of project finance over the past year in terms of PPPs, infrastructure and resources. As well, his firm has been quite successful in South-East Asia and Indonesia. It has recently formed a joint venture with a Japanese group and is starting to get business from Japan. The resources boom has also spurred the infrastructure sector, with an A$1bn coal loader expansion providing work for AAR, Clayton Utz, Allan & Overy and Blake Dawson and the A$4bn Wiggins Island coal loader having used AAR for the lenders and Blake Dawson for the borrowers. In the PPP sector, the A$2.8bn financing for the Royal Adelaide Hospital was one of the largest greenfield hospital projects in Australia. SA Health Partnership signed the deal earlier this year with 15 banks providing the finance. The winning bidder will get a 35-year concession and Clayton Utz, Allan & Overy, AAR and Freehills were the legal advisers on the project. Privatisation has also been a big deal area, with Queensland selling assets including the A$2.3bn Port of Brisbane, the A$613m Forestry Plantations Queensland, the A$1.8bn Abbot Point Coal Terminal, and the transfer of the A$3bn Queensland Motorways Ltd to the state s investment arm, QIC. The Queensland privatisations provided legal work for AAR, Minter Ellison, Mallesons, Freehills, Allan & Overy, Corrs Wesgarth and Rommel Harding-Farrenberg. According to Adam Stapledon, a partner at Allan & Overy in Sydney, 2011 has been a strong year for Australian project finance. The pipeline for the remainder of 2011 and 2012 also looks strong. There are a number of PPPs in the EOI or RFP stage, including hospitals in Queensland and Victoria, and the Sydney Convention Centre PPP and North West Rail Link in NSW. NSW has also announced a pipeline of privatisations, filling the gap left by the end of the Queensland privatisation programme, starting with the Sydney Desalination Plant and Port of Botany in 2012, but ultimately expected to include the electricity transmission and distribution network, Stapledon says. This type of international activity on Australian soil has seen international law firms become far more active locally. While there are concerns about the impact of European sovereign debt issues on liquidity, particularly for European banks, we are seeing increasing interest in the Australian PF market from American, Chinese, Japanese and Canadian banks, as well as some steps towards greater participation by domestic and offshore infrastructure funds. Export Credit Agencies will be increasingly important sources of funding and support as a result of the same capacity constraints. There is no doubt that, despite the economic meltdown in Europe and to some extent the US, the Asia-Pacific century and its economic dominance will continue. The A$120bn worth of deals in the LNG sector, the NSW privatisation process and new PPP deals, as well as ongoing work in the resources sector, will ensure a steady flow of fees for the legal profession. The magic circle may have described the business of the top five UK firms in the past, but as deal flow in Europe recedes the new magic circle is Australia and the Asia-Pacific. Project Finance International November

12 FEATURES AMIDST THE EUROZONE CRISIS WHILE THE EUROZONE SOVEREIGN DEBT CRISIS CONTINUES TO AFFECT THE LOAN MARKETS IN EUROPE, LEADING LAW FIRMS HAVE SEEN A LOT OF ACTIVITY IN THE NATURAL RESOURCES SECTOR IN 2011 AND SEE A PIPELINE OF OPPORTUNITIES IN THE NEW YEAR. BY SPRIHA SRIVASTAVA. The persistent crisis in the eurozone has affected the project finance market across the Europe, Middle East & Africa region (EMEA) as a whole. Within Europe, one can see that the loan market has definitely been negatively affected. However, leading legal players are of the opinion that the project finance market has still held up. Markets in Middle East are still quite active and in Africa too there is a lot of activity in the mining and oil and gas sectors. Philip Fletcher, a partner at Milbank Tweed, listed three main factors that affect project finance globally. These are commodity prices, political stability and financial liquidity. Generally, commodity prices and (with some exceptions) political stability are favourable. The European banks are facing problems with financial liquidity, however the regional and Asian banks are in a much better position, and ECAs and multilaterals have helped keep the market active, he said. The bigger and more promising projects with commercial viability and strong sponsors in the market are expected to progress, but weaker projects might have a tendency to be stalled. The general opinion has been that the market in 2011 started off very slow but picked up speed later with deals such as Barzan that took off very quickly. However, the question of bank liquidity still remains very significant since a number of deals in the project finance space have been affected by this. Many in the market believe that liquidity in regional banks is being maintained and a number of projects are thus being financed by local markets. But this is not true for most of the markets. In countries such as Turkey, the eurozone crisis has taken its toll on regional banks as well. A number of deals have been delayed due to reluctance on the part of local banks to fund long-term projects. Schemes such as the mega Gebze Izmir highway have been delayed from time to time due to lack of adequate funding. Recently, the project has been divided into two parts in order to speed up the process but that has led two banks to withdraw from the financing. The case is similar with a number of other emerging markets within the EMEA region. A market source suggests that projects in these markets rely heavily on syndication from foreign banks. In the present day scenario, foreign banks are extremely reluctant to commit funding for long-term infrastructure projects. In situations such as these projects tend to be delayed till funding is secured. However, the source went on to say that multilaterals such as the EBRD and the EIB are still committed to supporting infrastructure projects in these countries. According to Daniel Tyrer, head of infrastructure and energy at Linklaters: There are financing and infrastructure projects that are still happening, even in times of crisis. ECA and multilateral involvement has made it easier for projects to get financing. Export credit agencies and multilaterals are aware of the difficulties in the banking market and thus are being more visible in arranging funds for large projects. The natural resources space with a strong focus on oil and gas and mining has survived even in the times of crisis and is expected to continue moving forward even in 2012, according to a market source. Tyrer also expects that the market will slowly come back to normal in 2012 and there will be a strong focus on the renewable sector. As long as government support for the sector continues, there is good potential for renewables in EMEA next year, he said. Linklaters is hoping to advise on several major financings, he adds. There are also some major oil and gas deals that we look forward to for next year. We expect a lot of infrastructure assets to change hands in 2012 (mainly in Europe) and we are actively targeting a number of these. When asked what Linklaters market strengths are to cope with the present day crisis, he said: Linklaters has one of the biggest teams around, with specialists in almost every PF field there is. This enables the firm to deliver the biggest, complex multi-sourced projects and sustains its reputation in the market for innovation and reliability. It is well trusted by banks, ECAs and multilaterals. The firm also has a strong relationship with many 56 Project Finance International November

13 EMEA major sponsors given its ever-increasing corporate client base in the energy and infrastructure sectors. Surprisingly, regional liquidity is still being maintained in African and Middle Eastern countries and despite the Arab uprising, investors are still keen to go into markets such as Libya, Morocco and Egypt. Regional banks are robust and projects are continuing to move ahead in various sectors. According to a market source, mining projects worth US$50bn are currently in the pipeline in Western Africa and there is a lot of investor interest in that region. One of the biggest projects of the year from the natural resources sector is the US$7.5bn Ma aden Phosphate Company project in Saudi Arabia, according to Project Finance International s Legal Survey. In the field of Oil & Gas, the US$3.5bn Nord Stream Phase 2 project in Russia takes the lead and following that is the US$2bn Jubilee Kosmos project in Ghana among others. The natural resources sector has clearly dominated the list of deals in 2011 and is expected to be a promising sector for the next year as well. The PFI Legal survey results for EMEA points out that apart from the natural resources sector, government-backed transport projects have also progressed well, especially in Western Europe. One of the reasons for this, according to a project finance lawyer, is the presence of well-known sponsors backing projects. Another reason is the commercial viability of the project. In the transport sector there have been a number of significant deals this year. The biggest project of this year, according to the PFI Legal Survey is the US$9.1bn Tours-Bordeaux High Speed Rail project in France. The list of big projects in EMEA region also includes the US$2.4bn High Speed 1 rail in United Kingdom and the US$1.5bn A63 toll road project in France. The renewable sector has also continued to move forward in 2011 and according to many leading law firms, the renewable space will continue to progress in the coming year as well. For example, the R100bn South African renewable energy programme has already been launched and is expected to take off in Going back to the list of projects in PFI s legal survey 2011, one can see a number of renewable projects in the EMEA region. The Us$2.6bn Global Tech North 1 Windfarm project in Germany, the US$1.7bn Thornton Bank Offshore wind project and the US$1.7bn Meerwind Offshore wind projects are just a few examples of deals in the renewable sector this year. There are some major oil and gas deals that we look forward to for the next year. We expect a lot of infrastructure assets to change hands. Fletcher is of the opinion that opportunities in 2012 will be in the natural resource sectors of oil and gas and mining, apart from the usual power and telecommunications sectors, and Milbank Tweed is looking forward to these opportunities in the new year. Milbank Tweed has been active in the project finance market for a very long time and we have deep familiarity with blending together the broad range of financing sources needed to help overcome the liquidity problems that exist in the present day market, said Fletcher. The natural resources sector has been extremely promising in 2011 and according to market sources there are number of opportunities to look forward to in These are expected to be in South Africa, Western Africa, Russia and Turkey. Philip Stopford, a partner at White & Case, expects the natural resource space to be strong in 2012 and the PPP/PFI space to be challenging. National oil companies will try to do value-added projects in their jurisdiction rather than export basis commodities. You will see continuing downstream programmes in Saudi Arabia, Kazakhstan, Azerbaijan and so on, he said. Stopford also expects massive demand for power in Africa in 2012, while markets in Middle East will remain robust, according to him. White & Case also expects to be involved in a number of project finance deals, especially in the natural resources sector in White & Case has a significant position in the natural resources space, with expertise in the power sector and PPP/PFI sectors as well. The firm has closed large transactions in the recent past and we are helped by a strong geographical presence as well, he said. Pointing to the issue of liquidity, Stopford said: The question of bank liquidity remains very significant since that has been negatively impacted by the eurozone crisis. However, regional liquidity is strong and deals like Barzan have been financed in large part by regional liquidity. In this market, according to Stopford, there have been three main trends first, different players have emerged, second, the amount of ECA involvement has increased and finally, as noted above, a liquidity trend is emerging in the market. With 2011 almost coming to an end, leading law firms in the market are now gearing up for better prospects in While the markets will not change dramatically, one can expect bigger projects to progress and leading law firms to continue to target areas such as natural resources. However, bank liquidity is one issue that will continue to concern markets, especially in Western Europe, for the next few months. The recent elections in Italy and Greece may be viewed as an initial positive by the market but unless the eurozone sovereign debt crisis reaches a solution, bank liquidity constraints will continue to linger. Project Finance International November

14 Thomson Reuters All rights reserved. RP6DRMVGZSAA. REUTERS/China Daily,China Daily Information Corp (CDIC) NEW! PFI ENERGY FINANCE BRIEFING XXX QȮF DPN THE PFI ENERGY FINANCE BRIEFING PROVIDES A CONCISE DAILY SUMMARY OF CAPITAL MARKETS AND M&A ACTIVITY WITHIN THE ENERGY SECTOR. ed to subscribers at midnight UK time, this unique report delivers up-to-date and in-depth intelligence on deals and financings across M&A, Loans, Bonds, IPOs and Renewables. Each Briefing contains: ȕ " %BJMZ.BSLFU 8SBQ a round-up of the day s top stories, split by asset class ȕ -FBHVF 5BCMFT focusing on the top bookrunners for particular asset classes ȕ %FBM 1JQFMJOFT a round-up of the deals coming to market, or those rumoured to be coming soon. The Briefing makes extensive use of Thomson Reuters deal data to discern trends in pricing, fees and the markets themselves, paying particular attention to the growing sectors including renewables, gas and LNG. And it features a strong focus on the people within the sector including regular interviews with key industry players and news of who s moving where. 5P SFRVFTU B TBNQMF DPQZ PG UIF 1'* &OFSHZ #SJFȮOH FNBJM SN FNFBTBMFT!UIPNTPOSFVUFST DPN