Senior associate Sébastien Plamondon looks at multi-contract structures in construction contracts, and practical solutions to manage interface risk in such structures. (Read more).

In Trinity News, we are pleased to announce that we continue to grow our team across our offices. In London, we welcome Pravesh Lallah as counsel, who joins us from his own political risk consultancy having also worked for several years at Allen & Overy. We also welcome Kahema Mungili as an associate specialised in projects and construction matters, who joins us from Clyde & Co. In addition, Darren Williams joins us as billing manager.

In Deal News, since the last edition of Focus, we have been delighted to advise our clients in reaching the following milestones:

• Our Paris office has advised Africa REN and Walo Storage SASU in relation to the Walo Storage project which reached financial close in July 2024. The Dutch development bank FMO and the Emerging Africa Infrastructure Fund (EAIF), acting through Ninety-One, fund manager of EAIF will invest up to a total of €32 million in syndicated debt into Walo Storage. Walo storage is the first battery storage project in West Africa dedicated to frequency regulation. In a country challenged by grid constraints due to limited spinning reserves and the ongoing integration of intermittent energy, the Walo storage project will bring much-needed stability to the local grid and reduce power outages. Furthermore, this initiative supports Senegal’s 2030 Universal Access goal by producing 16 MW from green energy sources and is anticipated to reduce carbon dioxide (CO2) emissions by 17 000 to 21 000 tpy. The Trinity team led in Paris by Partners Marianna Sédéfian, Pierre Bernheim, Luke Muchamore (London), with support from Senior Associate Alexis Giroulet. (Read more).

• Our Paris office has advised Scatec ASA and AEOLUS SAS on the successful financial close of the 100MW Sidi Bouzid & Tozeur solar projects in Tunisia. This major milestone marks a significant advancement in Tunisia’s renewable energy landscape. The total project cost, estimated at EUR 79 million, is being financed through a combination of non-recourse project finance debt, concessional loans, and equity contributions from the partners. The senior lenders for the projects include the EBRD and Proparco, with additional concessional financing provided by the Clean Technology Fund and the Global Environment Facility. The Trinity team was led in Paris by Partners Marianna Sédéfian, Pierre Bernheim, Luke Muchamore (London), with support from Senior Associates Yassine Allam and Sébastien Plamondon. (Read more).

• The Government of Malawi and Mkango Resources Ltd announced in July the completion of a Mining Development Agreement for the Songwe Hill Rare Earths Project to be developed in Phalombe, Malawi. The execution of the MDA marks a significant milestone for Malawi’s mining sector and is reflective of Africa’s central role in the supply of rare earths which are critical for the green transition.  Trinity is privileged to have worked closely with the Malawi Government to support the Government and advise on the Mining Development Agreement. Partners Conrad Marais (London) and Lucien Bou Chaaya (Paris) and Senior Associate Anne-Gaëlle Cottenceau (Paris) advised on the transaction.

• Trinity advised the Facility for Energy Inclusion (FEI), on its multi-million USD facility to finance its telecoms transaction in South Sudan, alongside Finnfund, and the asset management company of iEng Group, Communication and Renewable Energy Infrastructure (CREI). The financing will enable CREI to provide “energy as a service” to a telecoms company in South Sudan by developing, building, operating, and maintaining energy assets. The transaction team comprised Rinku Bhadoria (Finance), Luke Muchamore (Projects) and associate Katchenin Kone.  The deal marks Trinity’s closing of an infrastructure transaction in its 50th country in Africa. (Read more).

• A team from Trinity London – Partner Fiona Gulliford together with Associate Rhiannon Lock – have advised the Government of the Maldives and the Asian Development Bank in the design, drafting and tendering of a 12.5MW grid-tied solar PV project to be developed across multiple islands in the Maldives archipelago. The bid deadline closed in September 2024 and the Government is currently evaluating the bid submissions. The scope of the Project will be to design, build, finance, own, operate, maintain, and transfer or decommission 12.5MW solar photovoltaic power facilities across 66 Sites in 11 outer islands in the Maldives. The capacity of sites range from 25kWp to 1.2MWp. The generation facilities will connect to new interconnection facilities and BESS systems, which are currently being constructed and upgraded by the Government on each of the relevant islands under a separate project Accelerating Sustainable System Development Using Renewable Energy Project.

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Welcome to the Summer 2024 edition of Focus.  Trinity is proud to be attending the Africa Energy Form (AEF) in Barcelona from 25 to 28 June 2024. Please come and see us at Stand A114.

The beginning of June saw the Asia Clean Energy Forum, hosted by the Asian Development Bank in Manila. The theme of the forum was “Accelerating the Clean Energy Transition and ensuring Energy Security and Affordability – Time for Urgent Action Now”, focusing on how to improve access to clean energy amongst some of the most disadvantaged communities in the Asia-Pacific and Central Asian region. Over five days, the conference looked at green energy transition, energy efficient policies, the role of the carbon markets, ocean technologies and financing solutions – with varied sessions focusing on specific sectors and jurisdictions. Trinity London Partner, Fiona Gulliford, joined the panel for an ADB led session on “Structuring and Financing Pathfinder Climate Projects in New Sectors”. The session looked at diverse and complex pathfinder projects supported by ADB in the region, including structuring bankable green hydrogen projects and promoting and subsidizing clean cooking fuel projects in South East Asia to district heating projects in Uzbekistan, and the first in jurisdiction floating and ground mounted solar IPP being developed in the Maldives. With her fellow panelists, Fiona looked at the key challenges to developing climate friendly projects in new sectors, often utilizing new technologies, and how to address or mitigate the key risks to the private sector, in order to catalyze project development and procure financing support.

In recent times clear signs are showing of a growing secondary market for African infrastructure assets. Many of our readers will have been involved in primary market transactions over the years, and partner Conrad Marais and associate Adekanmi Lawson provide their observations here on the growing maturity of the sector on the African continent.

Partner Natasha Peter and associate Maksym Kodunov take a look at approaches to excluding liability for wilful default, looking at recent English case law and comparing with principles of French law. You can read their article here.

In an OHADA law update, partner Marianna Sédéfian summarises the entry into force of the new uniform act on organisation of simplified procedures for debt recovery and enforcement procedures here.

We are again pleased to announce that we continue to grow our team across our offices.  In London, we welcome Katchenin Kone as an associate, who joins us from a large UK firm having also worked for several years in-house at a major investment bank. Yusuf Olalere joins as a paralegal, and he has previously worked at one of the largest Nigerian law firms. We also welcome Lydia Morgan as a legal secretary.  In Paris, we are very pleased to announce that Alexis Giroulet has been promoted from associate to senior associate, and Mama-Sahale Souare will be promoted from intern (stagiaire) to associate this month. In addition, Yolande Lopez joins the Paris office as Office Manager and Personal Assistant.

In Deal News, since the last edition of Focus, we have been delighted to advise our clients in reaching the following milestones:

• Our Paris Office has advised Groupe Qair (“Qair”), an independent renewable energy company, in the context of the financing of a greenfield solar photovoltaic plant with a total capacity of 10-megawatt to be located in Feriana town, Kasserine Governorate, Tunisia. The project, developed under Tunisia’s authorisation regime, will enable the country to reduce its CO2 emissions by 8,560 tonnes a year and to decrease its reliance on fossil energy. The project is in line with Tunisia’s goal of achieving 30% renewable energy production by 2030. Trinity’s team was led from Paris by Marianna Sédéfian (Partner) and Yassine Allam (Senior Associate) acting as international legal advisers, with the support of Meziou Knani & Khlif on Tunisian law aspects. https://www.qair.energy/tunisia-qair-secures-financing-for-two-10-mw-photovoltaic-power-plants/

• We are delighted to have advised Meridiam on the pivotal loan from British International Investment to Rift Valley Energy, its wholly owned subsidiary, to finance projects that will expand access to sustainable electricity in rural areas in Tanzania. The wind and hydropower projects supported by the financing will provide energy to about 170,000 people per year and connect 4,000 businesses and households to the grid for the first time. The deal highlights Trinity’s continued commitment to supporting rural electrification and our expertise in portfolio-based financing. The Trinity team was led by partner Rinku Bhadoria with corporate input from partner Conrad Marais and support from senior associate Elizabeth Handley. https://www.bii.co.uk/en/news-insight/news/bii-signs-agreement-with-meridiam-to-provide-15m-to-rift-valley-energy-to-expand-access-to-sustainable-energy-in-tanzania/

• Trinity International’s Paris Office has advised the Facility for Energy Inclusion (FEI), a fund managed by Cygnum Capital, on all aspects of a financing granted to NuRAN Wireless (Africa) Holding, a wholly owned subsidiary of NuRAN Wireless Inc. (NuRAN). NuRAN is a rural telecommunications company that meets the growing demand for wireless network coverage in remote and rural regions, especially in Africa. The financing will enhance the implementation of renewable energy assets for mobile network infrastructure in respect of existing and new Network as a Service agreements in Cameroon and DRC. The funding from FEI will allow NuRAN to connect a population of over 3 million, bringing connectivity to undeserved communities. We are proud to have assisted the FEI team. Trinity’s team was led from Paris by Marianna Sédéfian (Partner), Yassine Allam (Senior Associate) and Yalda Khalife (Associate) acting as international legal advisers, with the support of Benoit Chambers on Mauritian law aspects, Amadagana & Partners on Cameroonian law aspects and OVK Law Firm on Congolese law aspects.

• Trinity is proud to have advised AgDevCo on its recent investment in Cashew Coast – a fast-growing cashew nut processing business in Cote d’Ivoire. AgDevCo’s mezzanine loan of €9.0 million (5.9 billion FCFA) will finance the expansion of the company’s processing capacity and the construction of new warehouses, alongside farmer productivity programmes. The investment is a huge step in the right direction for African agribusiness. Partner Lucy Johnson led the team with assistance from counsel Kanmi Lawson and associate Demilade Banjoko. Further details are provided in AgDevCo’s press release here: https://agdevco.com/site/assets/files/2079/press_release_cashew_coast_june_2024_-_english.pdf

• Our Paris Office has advised STOA, an impact fund created in 2017 by the Caisse des Dépôts and the Agence Française de Développement (AFD) investing in infrastructure and energy in emerging and developing countries, in relation with its investment in NetZero, the French company pioneering the long-term sequestration of atmospheric carbon in soils. This marks STOA’s first investment in carbon removal. The transaction relates to a total proposed investment of €18 million and should allow NetZero to industrialize its technology and to deploy its sites on a large scale in tropical countries, with a view to sequester more than 5 million tonnes of CO2 in aggregate, from now and until 2030. The Trinity team was led by Giuliano Lastrucci (Counsel), supported by Pierre Bernheim (Partner) and by Francesca Ngahane (Associate) and Mama Sahale Souare (Trainee).

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Trinity International advised Eni on this transaction, in liaison with Thierry Mamimoue at AfrikaBlue for Congolese law advice.

The Trinity team was led from Paris by Lucien Bou Chaaya (Partner) and London by Adekanmi Lawson (Counsel), supported by Giuliano Lastrucci (Counsel, Paris), Anne-Gaëlle Cottenceau (Senior Associate, Paris) and Francesca Ngahane (Associate, Paris), with valuable input from Stéphane Brabant (Senior Partner, Paris).

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Trinity is proud to be a supporter of the inaugural Johannesburg Arbitration Week, which takes place from 9 to 11 April 2024. Bringing together arbitrators and arbitration practitioners from across Africa and worldwide, the conference will be a great opportunity to discuss the current themes that are shaping and transforming dispute resolution in Africa. Partner Natasha Peter is participating and is due to speak on a panel on “The Africanisation of Arbitration”. She looks forward to seeing many of our clients there, and, without wishing a dispute on anyone, some of our future clients too.

Green hydrogen is increasingly becoming the fuel of choice to reduce emissions of carbon dioxide. Our newest Partner, Lucy Johnson, explores the political risks of green hydrogen projects in emerging markets in our main article this season here .

One of the interesting parts of practice across multiple jurisdictions is to see the development of new laws and regulations, particularly in the emerging economies and sectors in which we practice, where the legal context may not be as developed as it is in Europe and North America. On this theme, associates Alexis Giroulet and Maha Sary explain the new electricity law in Burundi here.

In Trinity news, we are very pleased to have expanded our team quite significantly over the past few months. Lucy Johnson’s promotion to Partner is now effective. In Paris, we have new Associates: Maha Sary, Yalda Khalifé, Yassine Allam, Sina Abadie and Lucas Aichelmann. We look forward to announcing several new arrivals in London very soon. We are also glad to be hosting interns: Lucas Sadok and Mama-Sahale Souaré. We have also been joined by a new consultant, Sarah Smit, who, as many of our clients know, is a senior lawyer with many years’ experience of financing transactions in emerging economies.

In Deal News, over the first calendar quarter, since the last edition of Focus, we have been delighted to advise our clients in reaching the following milestones:

• We advised Triodos and OikoCredit on their equity investment in ARC Power Rwanda Limited, a company based in Rwanda which is developing low and medium power electricity networks and minigrids within Rwanda. 
• Trinity advised Meridiam in closing an equity financing solution for Meridiam’s acquisition of Kipeto PLC, the second largest operating wind power project in Kenya, providing clean power to 250 000 homes. The financing was provided by Standard Bank.
• Following our advice to Norfund, the Norwegian development finance institution, along with Kommunal Landspensjonskasse, a Norwegian pension fund, in respect of the financing of a continuation vehicle established by CEC’s existing shareholder Affirma Capital which will hold Affirma’s existing  36.34% stake in CEC, we advised the same clients on the conversion of their financing into equity in the continuation vehicle.
• We advised Rawbank, FBNBank DRC SA and Absa Corporate and Investment Banking on an innovative mining financing provided to Kamoa Copper in the Democratic Republic of Congo. The 200 million dollars financing will support phase 3 of the Kamoa mine expansion project, which will produce around 600,000 tonnes of ore and generate an additional 178 megawatts (MW) of clean hydroelectric power for the national grid.
• Trinity advised Eni on the completion of the sale to Perenco of Eni’s participation interest in several upstream permits in Congo, non-core to the Company strategy in the Country, after having obtained the approval of relevant authorities. We worked in liaison with Thierry Mamimoue at AfrikaBlue for Congolese law advice.
• Trinity advised STOA, an impact fund created in 2017 by the Caisse des Dépôts and the Agence Française de Développement (AFD) investing in infrastructure and energy in emerging and developing countries, in relation with the entering into of a memorandum of understanding regarding a proposed investment in NetZero, the French company pioneer in the long-term sequestration of atmospheric carbon in soils through biochar. The transaction relates to a total proposed investment of €18 million and should allow NetZero to industrialize its technology and to deploy its sites on a large scale in tropical countries, with a view to sequestrate more than 5 million tonnes of COZ in aggregate, from now and until 2030. NetZero is a Milestone Award winner of Musk Foundation’s XPRIZE Carbon Removal competition, a recipient of the “Efficient Solution” label from Solar Impulse Foundation, a Green Tech prize winner of the Tech for Good Awards, and a certified carbon-removal project under the Puro Standard.
• Trinity is proud to have advised ACWA Power on a public-private partnership agreement with the Republic of Senegal and Senegal’s national water company for the financing, construction, operation and maintenance of 400,000 m³/day desalination plant north of Dakar. This landmark SD 800 million investment will bring clean drinking water to millions of people and contribute to Senegal’s sustainable development goals. Trinity worked with the support of Alioune Mboup from Mame Adama Gueye and Partners on Senegalese law aspects.
• Trinity advised the lenders – Facility for Energy Inclusion (FEI) – a fund managed by Cygnum Capital – and Proparco, in relation to a facility to AktivCo Madagascar, a subsidiary of AktivCo SAS in Madagascar. This financing is an addition to the EUR 100 million debt package provided by the existing lenders group (FEI, Proparco, Norfund and AfricaGoGreen) in 2022 and 2023 to the AktivCo Group and its subsidiaries in Burkina Faso, Cameroon, Chad, Côte d’Ivoire, Niger and Senegal. This commitment of the lenders to support further the growth of AktivCo to respond to the growing demand from the telecom sector for sustainable energy. 
  AktivCo is an energy services company (ESCO) and a fully owned subsidiary of Camusat Group, a global player for the roll-out of telecom networks. AktivCo SAS provides energy solutions to telecom network operators in Africa, including the construction of renewable energy power plants for telecom towers to replace polluting diesel generators. Trinity advised the lenders in liaison with Sahondra Rabenarivo from ALN Madagascar for Malagasy law advice.
• Trinity advise the Asian Development Bank and the Government of the Maldives in respect of the development of renewable energy tenders to be launched by The Government of Maldives. The first tender was launched in March 2024, for a 12.5MW ground mounted and rooftop solar project, planned for the outer islands. The developer will benefit from ADBs investment in new and upgraded transmission and battery storage facilities on each of the islands, through the Accelerating Sustainable System Development Using Renewable Energy (ASSURE) project, plus financial incentives for the project being offered through Asia-Pacific Climate Finance Fund, a multi-donor trust fund. The objective of the fund is to support the development and implementation of financial risk management products that can help unlock capital for climate investments and improve resilience to the impact of climate change. The project will be the largest private sector led project in the energy sector in Maldives in terms of capacity and investments and is aimed at reducing the Islands’ reliance on fossil fuels and helping combat the impacts of climate change on the climate vulnerable Islands. Trinity has a world-leading practice in the development and financing of innovative power solutions in island nations

 .

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Trinity News

Since the last edition, the Trinity team has been busy advising on ground-breaking and pathfinder renewables deals across the African continent, from Zambia’s first green bond to Togo’s largest IPP, as well as a swathe of other corporate M&A deals in a burgeoning infrastructure market, bolstered by a growing Trinity corporate team.  We have also been busy in Asia, with new mandates in Uzbekistan, India, Timor-Leste, Mongolia, Laos, Cambodia, Vietnam, Papua New Guinea and the Philippines.    

Our global team continues to grow and we are delighted to announce the following promotions:

• Sébastien Plamondon, based in our Paris office, to Senior Associate;
• Giuliano Lastrucci, also based in Paris, to Counsel;
• Adekanmi Lawson, based in the London office, to Counsel; and
• Lucy Johnson, based in the London office, to Partner. 

The London promotions take effect from the start of April 2024 and the Paris promotions take effect from 1^st January 2024. Congratulations to our rising stars, and the future of emerging markets transactional advice.

We are recruiting in our Singapore and DC offices too – watch out for LinkedIn announcements in due course!

Whilst much of the activity centred around COP28 in Dubai, our team was busy globally in executing on its promises.  Partner, and newly appointed Head of Global Strategy, Kaushik Ray was in Washington D.C. discussed COP28 outcomes at the Atlantic Council and our disputes partner Natasha Peter has considered how this rapid growth in the clean energy sector affects dispute resolution in a special article for Focus. (Read more)

Deal News

During COP28, we were pleased to announce that:

• Our clients Meridiam and EDF signed a concession agreement and a PPA for a 64 MWp photovoltaic power plant in the Republic of Togo. For 25 years, the plant will supply more than 700,000 people with clean, renewable energy and avoid the emission of 1.4 million tons of CO2.
• Our clients Emerging Africa Infrastructure Fund and African Trade & Investment Development Insurance signed agreements with AMEA Power in respect of a 20MW solar PV project in the West Nile region of Uganda.
• Our client Scatec signed a US$100m loan facility with IFC in respect of the Release by Scatec platform.

We continue to advise our clients on these transactions to take them to anticipated financial close this year.

Already in 2024, we have advised our clients on the following transactions which have reached close:

• Copperbelt Energy Corporation PLC (CEC) on the listing and issuance of the first ever green bond in Zambia. (Read more)
• In a separate deal, advising Norfund, the Norwegian development finance institution, along with Kommunal Landspensjonskasse, a Norwegian pension fund, in respect of the financing of a continuation vehicle established by CEC’s existing shareholder Affirma Capital which will hold Affirma’s existing  36.34% stake in CEC (Read more).  Standard Bank also provided a large acquisition finance facility in relation to the transaction.
• Scatec on the signing of a US$100m facility agreement with IFC to fund Release by Scatec programme (containerised solar solutions for quick deployment) with utilities across African jurisdictions. (Read more)
• Meridiam on the closing of the acquisition of the 100MW Kipeto Wind Farm in Kenya.

Deal Teams

The Trinity team advising CEC on the green bond was led by Senior Partner Paul Biggs, alongside corporate lead partner Conrad Marais, finance partner Rinku Bhadoria, project documents partner Luke Muchamore and associate Rhiannon Lock. 

The Norfund / Affirma deal was led by Senior Partner Paul Biggs, Head of Private Equity Hugh Naylor, corporate partner Conrad Marais, finance and project documents lead partner Rinku Bhadoria, with assistance from consultant Patrick Leece, newly appointed Counsel Adekanmi Lawson, Counsel Eric Filipink and associate Rhiannon Lock. 

On the Scatec/IFC financing transaction, partner Simon Norris and associate Demilade Banjoko advised the Scatec Release team. Simon Norris, partner Conrad Marais, Counsel Adekanmi Lawson and associate Demilade Banjoko advised Meridiam on acquisition of the Kipeto wind project in Kenya.

Indaba

Stéphane Brabant and Lucien Bou Chaaya (from our Paris mining team) and Conrad Marais (from our London team) will be attending the Mining Indaba being held in Cape Town from 5 – 8 February.  We are working on a number of mining and related infrastructure projects across the continent from Sierra Leone, Ghana, Mali, Ivory Coast to Malawi, the DRC and Zambia and looking forward to catching up with our clients at the conference.  We continue to see strong growth in the mining sector with a broad range of engagements including working with government and mining companies on their mining development agreements, investments into exploration/mining projects and M&A.  Ancillary infrastructure, particular in relation to renewable power, has also become a significant part of Indaba and added to the significance of the conference. Many of the projects we have advised on recently, such as the CEC Green Bond, are driven by growth and confidence in the mining sector.  Please reach out to Stéphane, Lucien and Conrad if you have time to meet.

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The objective is to replace costly diesel and expand electrification in the region. Release operates on a unique leasing model, providing flexible short-or long-term contracts for the mining and utilities market, primarily in Africa, based on modular, movable and redeployable equipment.

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The COP28 discussions are a good opportunity to reflect on the exponential growth of the African clean energy sector that is already underway, and is due to snowball in the near future. The implications of an unprecedented speed of change and innovation are many and varied – but not least amongst these are the impact that it will have on dispute resolution.

The International Energy Agency (IEA) notes that at the moment, Africa only accounts for 2% of the world’s spending on clean energy, despite having around 20% of the world’s population.[1] However, this is set to change. In its Africa Energy Outlook 2022, the IEA models a Sustainable Energy Scenario for Africa, which sees primary energy supply rising by over a third by 2030. Renewables, including solar, wind, hydropower and geothermal account for over 80% of new power generation capacity to 2030 in this scenario.[2]

Arbitration is already a popular means of resolving disputes in the clean energy sector – it provides parties with a neutral forum, allows them to choose their decision makers, and results in an award that is comparatively widely enforceable.[3] But is it fit for purpose in this new context? We think that the answer is “yes”, although there are some unique features of the renewables industry that mean that arbitration clauses and proceedings need to be tailored to ensure that parties can make best use of its flexibility and cost effectiveness.  

1. Technical Complexity

Firstly, the growth of renewables will inevitably pose new technical challenges. Although basic wind and solar technologies are now well-tested, there is a constant pressure to innovate in order to reduce costs and increase efficiency. There are also emerging technologies in other renewables and ancillary industries: from floating wind and solar, to battery storage, green hydrogen or smart grids, to name but a few.

The corollary of an innovative and dynamic industry is a corresponding potential for disputes. Contractual provisions regarding the allocation of risk of technical failures and errors take on a particular importance.[4] Pressures created by first-of-a-kind technologies, upskilling the workforce, adaptation of supply chains, and creative solutions in deployment and management of new projects can all lead to unexpected tensions between contracting parties.

What this means is that all contracting parties must be prepared to deal with potential conflicts with patience, efficiency and a sense of perspective. In addition, if arbitration becomes necessary, the participants must be equipped to deal, not only with new contractual solutions, but also with the underlying technologies themselves:

• Arbitrators: One of the strengths of arbitration is that the parties have a large degree of freedom to choose their decision makers – parties need to ensure that they make full use of this possibility, to ensure that the Tribunal has the right mix of technical, regional, human and legal skills.

• Experts: Arbitration allows either the parties, or the Tribunal itself, to appoint an expert to opine on technical issues. A knowledgeable expert who is also able to present their position with clarity and conviction can be invaluable in educating the Tribunal (not to mention the parties’ own lawyers as well).

• Counsel: The legal profession is becoming increasingly specialised. To be equipped to present their client’s case and challenge and cross-examine their opponents, lawyers need to develop an in-depth and first-hand understanding of the new technologies involved.

2. Multiplicity of Stakeholders 

Secondly, it is a feature of most renewables projects that they operate in a complex regulatory, financial and human environment. For example, a project finance structure will involve contracts with lenders and with the contractors and subcontractors building the plant, as well as with a state offtaker and other government bodies. There will also be impacts on local communities: positively in terms of localised energy production and job creation, but also potentially negatively if issues surrounding land-use, labour rights, and so on are not appropriately handled.

Finance is central to the energy transition, and given the hesitations (real or perceived) of private investors in many countries in Africa, renewables projects are either fully or partially reliant on the involvement of concessional capital from development banks and donors.[5] Concessional lenders will typically require compliance with environmental and social standards and will demand a greater involvement in projects. As well as giving rise to a potential for disputes with the financing parties, this also means that lenders play more of a role in the decision-making process surrounding any dispute. Equally significant is the role of the State as offtaker, and state financial support mechanisms for renewables projects, the withdrawal of which has led to numerous energy charter treaty disputes in Europe and elsewhere.

Quite aside from the potential for disputes between stakeholders, the multiplicity of stakeholders also means that the decision to launch a dispute, and the way it is conducted, is complexified by the need to take competing interests and views into account.

Multiparty and multi-contract disputes can pose significant challenges in an arbitration context, but early attention to these issues can put the parties in the best position to ensure that all of the multiple disputes are resolved efficiently. Parties need to consider how any dispute proceedings will be structured upfront when drafting the disputes clause, and include provisions for consolidation and joinder of arbitrations under multiple contracts if appropriate. Further consideration then needs to be given to this issue if and when a dispute arises, to ensure that proceedings are streamlined to the extent possible, and avoid a multiplication of proceedings in different courts and tribunals.

3. Variety in the scale of projects and disputes 

Thirdly, the need to deploy a distributed network of power plants and infrastructure quickly will also put pressure on the traditional disputes model. Renewables projects are often smaller in scale than traditional energy projects (such as oil & gas, coal, and nuclear) and correspondingly quicker to build. In this context, a traditional 18-month to two-year litigation or arbitration is particularly burdensome – the dispute mechanism needs to be efficient, cost effective, and tailored to the particular circumstances of the case.

Certain disputes are suitable for resolution by negotiation or mediation. Alternatively, where the parties are entrenched in their positions and less likely to agree, is there a quicker means of getting a third-party decision? Anecdotal evidence suggests that adjudication and dispute boards are currently less widely used in the energy sector that in other fields of construction, and this seems to be a missed opportunity. Expert determination can also be useful to resolve disputes of a technical, valuation or financial nature.

However, arbitration remains the gold standard for larger and more complex disputes – and its inherently flexible nature means that it can be adapted to meet the particular circumstances of each dispute.[6] There are many bespoke solutions that can make proceedings more efficient, ranging from expedited arbitration to early determination, streamlined procedural timetables, virtual exchange of memorials and/or virtual hearings. The key – and indeed the answer to each of the issues outlined above – is to remain agile, and to ensure that consideration is given to creative procedural solutions at each stage of the process, from contract negotiation right through to enforcement of any award.

[1] See International Energy Agency, “Financing Clean Energy in Africa: World Energy Outlook Special Report”, September 2023.

[2] International Energy Agency, “Africa Energy Outlook 2022”, revised version published May 2023.

[3] In the Queen Mary University London “Future of International Energy Arbitration Survey Report”, 20 January 2023, 72% of respondents gave arbitration a score of at least 4 / 5 in terms of suitability for resolving energy disputes.

[4] For an example in a litigation context, see Mt Hojgaard A/S v E.On Climate and Renewables UK Robin Rigg East Ltd and Another [2017] UKSC 59BLR 477, involving an erroneous figure in the equation set out in the contractual requirements for the foundations of an offshore wind turbine.

[5] See Wendy J. Miles and Nicola Swan, “Chapter 18: Climate Change Financing and Dispute Resolution”, in Sherlin Tung, Fabricio Fortese, et al. (eds), Finances in International Arbitration: Liber Amicorum Patricia Shaughnessy, Kluwer Law International 2019, pp. 323 – 346.

[6] For some examples, see the ICC Arbitration and ADR Commission Report on Resolving Climate Change Related Disputes through Arbitration and ADR, 26 November 2019.

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