Energy and Infrastructure

Subscribe to Energy and Infrastructure via RSS
On the offshore drilling rig

Stapled W&I policies and synthetic policies will likely be increasingly common features of E&I transactions, although their feasibility should be assessed case by case.

By Simon J. Tysoe and Devdeep Ghosh

Warranty and indemnity insurance (W&I) is a long-established feature of M&A transactions in Europe, especially with private equity sellers. The 10th edition of the Latham & Watkins Private Equity Market Study shows that nearly 48% of all European M&A transactions in 2023 involved W&I with 65% of private equity sellers favouring W&I-backed exits. However, on the flipside, our market study indicates that on an aggregate basis only 35% of energy and infrastructure (E&I) transactions involved W&I, with varying levels of adoption across European geographies.

Certain recurring characteristics of E&I transactions could explain the dislocation in this trend: the sometimes challenging nature of the assets and jurisdictions for these transactions and the assets themselves frequently having a fragmented shareholder base, which usually means that there are no negotiated business warranties to be covered.

Along with a recent softening of the W&I market, two developments can help bridge this gap for E&I transactions: stapled policies and synthetic coverage.

portion of trees against office buildings

The Act demonstrates the UK’s renewed commitment to reaching net zero and paves the way for players in key industries to achieve their targets.

By Tom Bartlett, Paul A. Davies, JP Sweny, Michael D. Green, James Bee, and Samuel Burleton

On 26 October 2023, the UK Energy Act 2023 (the Act) received Royal Assent. The Act is a landmark piece of energy legislation detailing the UK’s approach to achieving energy independence and its net zero obligations.

The provisions of the Act lay the foundation for potentially £100 billion worth of private investment in clean energy infrastructure. The government has indicated that the Act is intended to support up to 72,000 jobs in carbon capture and storage (CCS) and hydrogen by 2030.

This blog post summarises how the Act is likely to impact key industries.

The Reform will extend tenors and reduce borrowers’ fees to encourage commercial bank lending into energy transition projects.

By Tom Bartlett, JP Sweny, Alexander Buckeridge-Hocking, and Samuel Burleton

The Organisation for Economic Co-operation and Development (OECD) has agreed a landmark deal to modernise the Arrangement on Officially Supported Export Credits (the OECD Arrangement), which is a welcome update for commercial banks, borrowers, and export credit agencies (ECAs) alike.

After several years of negotiation, the participants (Australia, Canada, the European Union, Japan, Korea, New Zealand, Norway, Switzerland, Turkey, the United Kingdom, and the United States) reached an agreement on 31 March 2023, to provide incentives and more favourable terms for financing energy transition projects.

In this article, we summarise the main changes to the OECD Arrangement and how they will benefit project financings and the wider energy transition.

With the recent UK “Green Day” announcements confirming the government’s support for CCUS, interest in UK CCUS projects is expected to continue to grow. While there are significant opportunities for investors, careful consideration will be needed to navigate a number of industry specific issues to achieve a successful CCUS project.

By Beatrice Lo, JP Sweny, Simon J. Tysoe, Evelyne Girio, James Richards, and Alexander Leighton

As governments and businesses around the world have committed to decarbonisation and achieving net zero by 2050, there has been growing activity in the development of, and investment in, carbon capture, usage and storage (CCUS) technologies. As the UK has one of the greatest carbon dioxide storage potentials of any country in the world (the UK Continental Shelf in the North Sea, accounting for approximately 85% of Europe’s carbon dioxide storage potential and able to safely store 78 billion tonnes), CCUS is a key focus for the government’s decarbonisation ambitions.

The UK government has unveiled a number of measures with the overall purpose of reaching net zero by 2050 and meeting the UK’s climate targets.

By Paul A. Davies, Beatrice Lo, JP Sweny, Simon Tysoe, Michael D. Green, and James Bee

On 30 March 2023, on what has been called the UK’s “green day”, the UK government announced a series of policies and proposals that it hopes will form the backbone of its strategy to drive investment into green energy with a view to achieving energy security and meeting the target of net zero greenhouse gas emissions by 2050.