LUXEMBOURG Law and Practice Contributed by: Ana Nicoleta Andreiana, Christophe Boyer, Noémi Gémesi and Tom Hamen, Loyens & Loeff
1. Market Trends 1.1 Energy and Infrastructure M&A Market Over the past 12 months, Luxembourg’s energy and infrastructure M&A market has remained resilient, albeit shaped more by global fundraising and structur- ing trends than by domestic asset-level transactions. As a leading fund domicile, Luxembourg continues to play a pivotal role in the global infrastructure invest- ment ecosystem, serving as the jurisdiction of choice for the establishment and financing of infrastructure funds. While inflationary pressures, rising interest rates, and geopolitical tensions – including the Russia–Ukraine war and the war in Gaza – have contributed to a more cautious global investment climate, Luxembourg has maintained its attractiveness due to its adaptable legal and tax framework. The jurisdiction’s robust security interest regime and creditor-friendly collateral laws – particularly in relation to share pledges over Luxem- bourg entities – have supported continued activity in fund structuring and leveraged finance transactions. Compared to the global pace of energy and infra- structure M&A, Luxembourg’s activity has been more stable but less directly exposed to asset-level vola- tility. The jurisdiction has seen sustained interest in energy transition, digital infrastructure, and sustain- able investment strategies, reflecting broader global trends. However, this activity is primarily reflected in fund formation and acquisition vehicle structuring rather than in direct domestic deal volume. 1.2 Energy and Infrastructure Trends Over the past 12 months, Luxembourg has experi- enced a notable shift in the strategic orientation of energy and infrastructure investment activity, driven by heightened ESG awareness, evolving EU regulatory frameworks, and broader sustainability commitments. While Luxembourg is not a direct asset jurisdiction for energy and infrastructure projects, its role as a leading fund domicile and structuring hub means that global and European trends – particularly those related to ESG and climate policy – are strongly reflected in its market dynamics.
A key trend has been the deepening integration of ESG criteria into infrastructure fund strategies. Lux- embourg-based managers have responded proactive- ly to regulatory developments such as the Sustainable Finance Disclosure Regulation (SFDR), the EU Tax- onomy, fund names guidelines and the newly intro- duced EU Green Bond Standard. These frameworks have led to more rigorous ESG disclosures, enhanced due diligence processes, and a reorientation of capital toward the energy transition, digital infrastructure, and sustainable transport assets. Luxembourg’s regulatory and legal environment con- tinues to facilitate the structuring of ESG-compliant funds, with particular emphasis on transparency, investor protection, and long-term sustainability. In terms of business approach, there has been a clear pivot toward financing the energy transition, with increased interest in renewable energy, hydro- gen infrastructure, and digital connectivity. Luxem- bourg’s flexible but predictable legal, regulatory and tax frameworks, combined with its robust collateral regime, collectively remains a key enabler for spon- sors seeking to structure complex, multi-jurisdictional transactions. 1.3 Access to the Energy and Infrastructure M&A Market In Luxembourg, investors typically access the energy and infrastructure M&A market through fund-based and acquisition structuring platforms, rather than through direct investment in domestic assets. The jurisdiction’s appeal lies in its sophisticated legal, tax, and regulatory framework, which supports the forma- tion and financing of infrastructure funds targeting global opportunities. Investor profiles are diverse, including institutional investors such as pension funds, insurance compa- nies, and sovereign wealth funds, as well as private equity sponsors and specialist infrastructure manag- ers. These investors are drawn to Luxembourg for its flexible fund vehicles – such as RAIFs (semi-regulated investment funds), and the unregulated SCSp (Special Limited Partnership) – which allow for tailored invest- ment strategies and efficient cross-border deploy- ment of capital.
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