Performance security in energy projects
Produced in partnership with Clarke Willmott LLP
Performance security in energy projects

The following Construction practice note Produced in partnership with Clarke Willmott LLP provides comprehensive and up to date legal information covering:

  • Performance security in energy projects
  • Background
  • Bonds
  • Parent company guarantees
  • Other types of security
  • Practical points

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marks the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. At this point in time (referred to in UK law as ‘IP completion day’), key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see Practice Note: What does IP completion day mean for Construction?

Background

The EU enforced a directive with a renewable energy supply target of 20% by 2020 and the UK imposed its own target of 20% renewable output by 2020. This has led to a growing global need for investment in the renewable energy sector.

The government is unlikely to invest further large amounts or increase tariffs during the current funding cuts. There has also been a drastic decrease in the availability of affordable debt from banks. Therefore, new ways must be found to maintain and increase investment into the renewable energy market alongside bank debt.

See Practice Note: Introduction to UK energy projects for construction lawyers

Banks have been forced to look again at their renewable energy portfolio and in some instances have looked to refinance in order to maintain lending. The prominence in renewable or 'eco-bonds' and other alternative funding vehicles is therefore on

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