LUXEMBOURG Law and Practice Contributed by: Ana Nicoleta Andreiana, Christophe Boyer, Noémi Gémesi and Tom Hamen, Loyens & Loeff
2. Establishing and Exiting Early- Stage Companies in the Energy and Infrastructure Industry 2.1 Establishing and Financing a New Company Luxembourg is not typically a jurisdiction where oper- ational early-stage energy or infrastructure companies are founded. However, it plays a key role in structuring and financing such ventures, particularly those target- ing international markets. Early-stage companies in this sector often use Lux- embourg to establish holding or financing vehicles, benefiting from the jurisdiction’s flexible legal struc- tures (such as the société à responsabilité limitée (SARL)), predictable tax environment, and investor- friendly regulatory framework. These structures are commonly used by venture capital and infrastructure funds to support start-ups focused on renewable energy, climate tech, and digital infrastructure. 2.2 Liquidity Events Typical liquidity events for ventures such as energy and infrastructure companies include sales to private equity, investors or other financial sponsors. Found- ers often achieve an exit by selling their shares, but, increasingly, it is common for founders and key man- agement to partially reinvest or “roll over” their equity into the acquiring company. This creates an incentive for them to continue driving the company’s perfor- mance post-transaction. Important managers often remain involved through equity participation, bonuses, or partial management buy-ins, ensuring continuity and aligning interests. This is especially common in private equity deals, where managers are frequently made co-owners to boost motivation and investment alignment.
Investor profiles might also comprise investors from the retail sphere, from high-net-worth individuals to full retail investors, wanting to invest in the infrastruc- ture asset class. Such investors would then typically invest in funds structured as Luxembourg Part II funds or ELTIFs (European Long-Term Investment Funds). A growing number of investors are pursuing ESG- aligned infrastructure strategies, reflecting broader market trends and regulatory developments. Luxem- bourg’s alignment with EU sustainability regulations, including SFDR and the EU Taxonomy, has made it a preferred jurisdiction for structuring funds focused on renewable energy, digital infrastructure, and sustain- able transport. In addition, Luxembourg’s robust collateral and secu- rity interest regime makes it an attractive jurisdiction for leveraged finance transactions, enabling investors to structure acquisition vehicles with enhanced credi- tor protection and financing flexibility. In summary, investors engage with Luxembourg’s energy and infrastructure M&A market primarily through fund structuring and financing mechanisms, leveraging the jurisdiction’s legal certainty, regula- tory sophistication, and international reach to access global infrastructure opportunities. 1.4 Energy and Infrastructure Projects While Luxembourg does not host major physical infra- structure projects, it remains a strategic jurisdiction for financing and structuring energy transition and infrastructure investments at scale. As a holding and fund domicile jurisdiction, Luxembourg is not the site of large-scale domestic energy or infrastructure pro- jects. Instead, it hosts the investment and acquisition structures that support major projects across Europe and globally. The current pipeline of activity is heavily weighted toward renewable energy and sustainable infrastruc- ture, reflecting broader investor demand and EU cli- mate objectives. Luxembourg-domiciled funds are increasingly backing projects in energy transition and (digital) infrastructure, often through cross-border platforms.
3. Spin-Offs 3.1 Trends: Spin-Offs
Spin-offs are not customary in Luxembourg’s energy and infrastructure sector in the traditional operational sense, given the jurisdiction’s limited domestic ener- gy production and infrastructure footprint. However,
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