SPAIN Law and Practice Contributed by: Miguel Cases, Toni Barios, Joaquín Fabré and David Navarro, Cases & Lacambra
are concluded within the “suspect period” determined by the court in the judgment declaring the insolvency of the borrower (usually two years before declaration of insolvency). For the effects of the commencement of an insolvency proceeding please note 7.1 Impact of Insolvency Pro- cesses .
Although not expressly regulated, Law 9/2017, of 8 November, on public sector contracts, regulates con- cession contracts used to finance public works with private capital. The investors assume construction, operational and service risk, are allowed to obtain returns on their investment, and must return the infra - structure to the public entity when the concession ter- minates. Although financing on the public side is to be totally or partially assumed by the concessionaire, in case of public works concessions contracts, financial or social profitability or specific requirements arise from the public interest in the concession, and public enti- ties may contribute public resources by means of grants and/or loans to finance the infrastructure. Finally, Spanish Royal Decree-Law 36/2020, of 30 December 2020, establishing urgent measures to modernise the public administration and implement the government’s recovery, transformation and resil- ience plan, provides the rules to manage projects, with a special focus on the digital and environmen- tal transformation of the Spanish economy, that shall benefit from Next Generation EU funds. This Royal Decree-Law creates a new form of public-private co- operation initiative called PERTE (Strategic Projects for the Economy Recovery and Transformation), which is expected to have a significant impact in the coming years in terms of PPP. 8.3 Governing Law Parties are free to negotiate and choose the applica- ble law for their project documents. Spanish courts would recognise a foreign governing law in contracts in accordance with Regulation (EC) No 593/2009 of the European Parliament and of the Council of 17 June 2008, on the law applicable to contractual obligations (Rome I) and, therefore, the choice of law should be enforceable, unless mani- festly incompatible with Spanish public policy. Sub- mitting project documents to a foreign jurisdiction is generally valid under Spanish law, to the extent the choice of jurisdiction has been validly made according to Spanish law.
8. Project Finance 8.1 Recent Project Finance Activity
The Spanish project finance market is wide and stable, with banks and sponsors familiarised with the avail- able structures to finance the construction and opera- tion of energy, infrastructure and real estate projects. The most active users of this form of financing are Spanish banks and sponsors of renewable energy projects (mainly photovoltaic, wind farms and, to a lesser extent, thermo-solar and biomass projects) where cash flows are generated through power pur- chase agreements (PPAs), feed-in tariffs or merchant price for the electricity produced. Social and transportation infrastructure projects are also usually financed through project financing struc- tures. The financing for the development of real estate pro- jects is also commonly structured based on the cash- flows that the assets will generate, particularly in the case of hotels, shopping centres, offices and logistics platforms. 8.2 Public-Private Partnership Transactions Public-private partnership (PPP) transactions have been prompted in Spain by public entities aiming to collaborate with private investors to develop, finance and manage large and critical public infrastructures. The financing of PPPs requires a legal analysis of the applicable legislation (national, regional and local) and the rights and obligations of the parties according to the tender documents.
577 CHAMBERS.COM
Powered by FlippingBook