Private Investment in Renewable Energy

Transcription

1 Private Investment in Renewable Energy Tia S. Barancik June 19, 2013 Attorney Advertising Prior results do not guarantee a similar outcome.

2 Why Invest in Renewable Energy? Legislative and Regulatory Support Renewable Portfolio Standards Financial Incentives Tax Incentives Capital Intensive Growth Opportunity Social Value of Green 1

3 Who Are the Investors? Utility Companies Private Equity Hedge Funds Infrastructure Funds Sovereign Wealth Funds Non-U.S. State Owned Enterprises 2

4 Considerations Affecting the Investment Decision Nature of the Project Technology Contracted vs. Merchant Location Bilateral contract in an unregulated market Competitive market What about New Jersey? What is being sold? Single plant Portfolio of plants Interest in a single plant or portfolio Who is the Developer/Seller? 3

5 Considerations Affecting the Investment Decision (continued) Stage of Development Under Development Under Construction In Commercial Operation External Sources of Value Tax Incentives State Regulatory Incentives Regulatory Considerations Antitrust FERC CFIUS RTO/ISO Rules 4

6 Inform the Purchase/Investment Agreement Structure of the Deal Investment Vehicle Payment/Contribution Terms Representations, Warranties and Covenants Completion (if applicable) Interconnection Off-Take and Other Contracts Permitting and Regulatory Sufficiency of Assets Indemnities 5

7 and the Continuing Commercial Relationship (if any) Governance Capital Calls Operation and Maintenance Asset Management Transactions with Affiliates Expansion, Business Opportunities and Non-Competes Transfer and Exit Rights 6

8 Transfer and Exit Rights Private Sale Merger IPO Alternative Exit Strategies 7

9 Contracts for a Joint Venture Purchase/Investment Agreement Investment Vehicle Organizational Documents Operation & Maintenance Agreement Asset Management Agreement Support Agreements Indemnity Agreements 8

10 Alternative Transaction Structures Organic Development Leasing Wholesale vs. Retail 9

11 Regulatory Considerations Tax Nature of Incentives Eligibility and Restrictions Antitrust DOJ/FTC review is not the same as FERC review FERC Approval Market Power Ongoing Regulation CFIUS RTO/ISO Rules 10

12 Attorney Profile T ia Barancik is a member of Sullivan & Cromwell s General Practice Group. She has over twenty-five years of experience advising U.S. and non-u.s. companies, private equity firms and financial institutions on the design and development of complex strategic M&A, investments, financings and credit transactions, with a particular emphasis on companies and transactions subject to regulation by the Federal Energy Regulatory Commission. Tia S. Barancik New York Office Phone: Fax: barancikt@sullcrom.com Special Counsel Vanderbilt University Law School, J.D Princeton University, B.A Ms. Barancik s M&A transactions in the energy sector include Borealis Infrastructure Management and Ontario Teachers Pension Plan Board s $1.49 billion sale of the Express Pipeline System to Spectra Energy; Southern Union s merger with Energy Transfer; German power giant E.ON s sale of its U.S. regulated holdings to PPL; Dynegy in its attempts to sell itself to The Blackstone Group and Icahn Enterprises; UIL s acquisition of U.S. regulated gas assets from Iberdrola; Canada Pension Plan Investment Board s acquisition of Puget Energy (as part of a consortium of private investors); China Huaneng Group s acquisition of Tuas Power from Temasek Holding; Scottish Power s sale to Iberdrola; Israel Corp. s and DS Constructions acquisition of a portfolio of Latin American power companies from Globeleq; E.ON s acquisitions of gas utility Ruhrgas and British electric utility Powergen; Dominion Resource s merger with Consolidated Natural Gas; National Grid s acquisition of New England Electric System; United Water s sale to Suez; and National Grid s transmission joint venture with GridAmerica. Her recent capital markets work includes representing the underwriters of NiSource Inc. in its 2010 common stock offering and advising Colbún S.A. in its 2010 note offering. Ms. Barancik also has advised financial institutions and other energy market participants with respect to compliance matters involving their energy trading activities and in connection with the acquisition or disposition of energy trading businesses, physical assets and contracts and on specific energy industry and regulatory issues impacting credit decisions. Ms. Barancik advises on energy legislation, regulatory reform efforts and the impact of ongoing FERC regulation of the conduct of business transactions in wholesale energy markets. She is recognized by Chambers Global and Chambers USA as one of the world s leading energy and natural resource lawyers, by Best Lawyers in America for Energy, and by New York Super Lawyers for Mergers and Acquisitions and Energy & Natural Resources. Prior to joining S&C, Ms. Barancik was a corporate partner in the New York office of Atlanta-based King & Spalding LLP, prior to which she had been a partner of LeBoeuf, Lamb, Greene & MacRae, LLP. 11

13 Sullivan & Cromwell: Renewable Energy Practice S&C is among the leading firms in the world in the energy industry. As the global business community has evolved in response to the growing need for alternative energy sources and green initiatives, S&C has expanded its legal practice to foster this movement throughout the world by helping communities directly through innovative project financings, by working with green corporations on strategic growth transactions, and by seeking to continuously improve our environmental legal and business practices. B R O AD - R AN G I N G E X P E R T I S E Strategic project financing and M&A Private equity investments Significant debt and equity offerings Federal Loan Guarantee Program Tax incentive regimes FERC and state energy regulatory requirements Environmental advice in commercial transactions, including risk analysis and reduction of risk, the handling of a broad array of environmental policy and regulatory issues, as well as any legal implications that may arise K E Y I N D U S T R I E S Solar Hydropower Wind Geothermal Biofuel Biomass Clean Coal Ethanol Sullivan & Cromwell is a dominant force in the energy world at large. It utilizes its national expertise in corporate transactions to assist industry clients with complex M&A, securities and energy trading work. It regularly represents regulated utilities, marketers and financial institutions, and often serves as underwriters counsel on major offerings. In line with recent market developments, the firm is increasingly called upon to handle restructuring work for energy industry players. C H AM B E R S U S A,

14 S&C Offices Worldwide New York Telephone: Facsimile: Broad Street New York, NY Washington, D.C. Telephone: Facsimile: Pennsylvania Avenue, N.W. Washington, D.C Los Angeles Telephone: Facsimile: Century Park East Los Angeles, CA Palo Alto Telephone: Facsimile: Embarcadero Road Palo Alto, CA London Telephone: Facsimile: New Fetter Lane London EC4A 1AN, England Paris Telephone: Facsimile: , rue Jean Goujon Paris, France Frankfurt Telephone: Facsimile: Neue Mainzer Strasse Frankfurt am Main, Germany Brussels Conference Center Telephone: Rue Joseph II, 1st Floor 1000 Brussels, Belgium Beijing Telephone: Facsimile: Suite 501, China World Trade Center Tower 1, One Jianguo Menwai Avenue Beijing , People's Republic of China Hong Kong Telephone: Facsimile: th Floor, Nine Queen s Road Central, Hong Kong Tokyo Telephone: Facsimile: Otemachi First Square East Tower 16F 5-1, Otemachi 1-chome Chiyoda-ku, Tokyo , Japan Melbourne Telephone: Facsimile: Collins Street, Melbourne, Victoria 3000 Australia Sydney Telephone: Facsimile: Level 27, The Chifley Tower, 2 Chifley Square Sydney, New South Wales 2000 Australia 13

15