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Environmental Risks Persist No Matter the Asset: Considerations for Financing Renewable Power Projects, Part 2

Environmental Risks Persist No Matter the Asset: Considerations for Financing Renewable Power Projects, Part 2 Background Image

Many view renewable energy (e.g., solar, wind) as having a low environmental risk profile and are not prepared for the myriad compliance and enforcement risks that may arise from the development of renewable power projects. While it is true that, once operational, renewable assets typically do not emit air pollutants or discharge wastewater, and so may have significantly fewer compliance obligations than a highly-regulated asset like a petrochemical complex, the construction phase of renewable projects arguably contains just as many risks as one would face for more stringently regulated assets.

This is the second part of a two-part article that discusses some of the more frequent environmental issues that can arise during renewable power project construction financing transactions. We encourage you to read Part I of this article, addressing the environmental risks posed by renewable energy projects, lender concerns regarding environmental risks and the impact of COVID-19, and issues that can arise during pre-acquisition due diligence, prior to reading this part. The following sections address environmental permitting for renewable energy projects, as well as common environmental-related provisions and issues in negotiating EPC contracts and financing agreements.

Read the entire article here.

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.