Energy and Power Projects in Pakistan

Developing an energy or power project is among the most complex undertakings in commercial law, a long-term, capital-intensive venture involving sponsors, lenders, off-takers, contractors, and the government, bound together by a suite of interlocking agreements and dependent on regulatory approvals and government support. Getting the structure, the contracts, and the approvals right is what makes a project bankable and viable over its decades-long life. Global Law Company advises sponsors, investors, lenders, and developers across Pakistan on the development, structuring, and documentation of energy and power projects.

A power project succeeds or fails on its legal and contractual foundations: a single weak link in the chain of project agreements, or a gap in the regulatory or government-support arrangements, can render a project unfinanceable. We bring the capability to structure and document these projects soundly, coordinating the many strands that an energy project involves.

The project framework and participants

An energy or power project in Pakistan typically involves a project company (often an independent power producer, or IPP), its sponsors and investors, lenders providing project finance, an off-taker purchasing the output, fuel or resource suppliers, engineering and construction contractors, operators, and the government and regulators. The framework engages NEPRA regulation and licensing and tariff determinations, the Private Power and Infrastructure Board and the Alternative Energy Development Board for power and renewable projects, the Board of Investment, and the foreign-investment and foreign-exchange regime. The project is held together by a suite of agreements among these participants and supported by government guarantees and assurances. Understanding this framework and how the participants and agreements fit together is the foundation of project work.

Project structuring and development

The structuring of a project, how the project company is owned and financed, how risk is allocated among the participants, and how the project is supported by the government and regulators, determines its bankability and viability. We advise sponsors and investors on structuring energy and power projects, including the project company, the ownership and investment structure, the allocation of the project risks (construction, operation, fuel/resource, off-take, and political risk), and the regulatory and government-support arrangements. Sound structuring, undertaken early, is what allows a project to attract investment and finance and to withstand the long-term risks it faces. We bring the structuring capability that bankable energy projects require.

The suite of project agreements

An energy project is documented through a suite of interlocking agreements, each of which must fit with the others and allocate risk soundly. These typically include the implementation or concession agreement with the government, the power-purchase agreement (or equivalent off-take agreement) with the off-taker, the fuel-supply or resource agreement, the engineering, procurement, and construction (EPC) contract, the operation-and-maintenance agreement, the connection and transmission arrangements, and the financing and security documents. We draft and negotiate these project agreements, with close attention to the allocation of risk across the suite and the consistency of the agreements with one another and with the regulatory and government-support framework. The quality and coherence of this documentation is what makes a project financeable and protects the sponsors over its life. We address the off-take dimension further in our [power purchase agreements](100-power-purchase-agreements.md) practice.

Financing, approvals, and government support

Energy projects depend on project finance and on a range of regulatory approvals and government support, and securing these is central to reaching financial close and beginning construction. We advise on the financing of energy projects, including the lenders' requirements, the security package, and the conditions to financial close, and we coordinate the regulatory approvals, NEPRA licensing and tariff, PPIB or AEDB processes, and other consents, and the government guarantees and support the project requires. Reaching financial close on a power project is a major milestone that depends on the alignment of the financing, the project agreements, the approvals, and the government support, and we work to bring these strands together so the project can proceed.

Disputes and the life of the project

Energy projects run for decades, and disputes can arise at any stage, during construction (delay and defects under the EPC contract), in operation (under the off-take, supply, and OandM agreements), over tariffs and regulatory matters, and over payments and government obligations. We advise on managing and resolving project disputes through the dispute-resolution mechanisms in the project agreements, including arbitration, and we represent project participants in these disputes. Because project disputes can threaten the viability of a long-term, high-value project, managing them effectively, and building sound dispute-resolution mechanisms into the agreements from the outset, is central to protecting the project. We bring both the transactional and the dispute capability the life of a project requires.

How Global Law Company helps

We advise sponsors, investors, lenders, and developers across the whole life of energy and power projects, structuring and development, the suite of project agreements, financing, approvals, and government support, and project disputes. Because these projects are complex, long-term, and dependent on the alignment of many strands, we bring the combined regulatory, transactional, finance, and dispute capability they require, coordinating with technical and financial advisers and lenders' counsel. Our focus is bankable, well-documented projects that withstand their long-term risks.

Why choose Global Law Company

Power-project work rewards advisers who can structure projects, draft and align the suite of project agreements, coordinate financing and government support, and handle disputes, and clients value that we bring all of this. We deliver the structuring, documentation, and approvals that make projects bankable, and we protect them through their life. For complex, long-term energy projects, that thorough capability is exactly what is needed.

Talk to a power project lawyer in Pakistan