Carbon matters. - Home | Linklaters | Global Law Firm · climate change. We understand the...

Our climate change practiceNovember 2008

Carbon matters.

Introduction.

You can rely on our in-depth knowledge of emissions trading and carbon credit sales structures. We have considerable experience of advising corporates, hedge funds and financial institutions on this innovative and increasingly influential market. This has encompassed advising a major investment bank on its acquisition of a carbon company and its portfolio, advising a Japanese bank in its role as arranger and lead manager in a USD 25m CER-linked note by an international development bank, establishing online auction platforms for major brokers of certified emissions reductions (CERs), purchasing CERs in the secondary market on behalf of the government of an EU member state, advising on a joint venture between a hedge fund and a private equity house to secure CERs from various projects worldwide and on the creation of a number of carbon funds.

Linklaters is widely recognised as a market leader in the voluntary emissions markets in both the US and Europe and has worked with a number of investment banks on their voluntary markets acquisitions and strategy. We also have considerable experience in the developing area of forestry: assisting a number of African governments on the drafting of laws and strategy in relation to reducing emissions from deforestation and degradation (REDD), forestry and land-use rights; and assisting a project developer in the Democratic Republic of Congo develop CDM forestry projects.

We are a leading contributor to the dialogue between industry and government on how the carbon capture regulatory regime should develop. Recently, we advised a leading multinational energy company on regulatory compliance issues arising under existing EU and UK environmental regimes from a major carbon capture and storage project.

As climate change fast becomes the issue of our times, companies, banks and funds look to maximise business opportunities and understand the risks. At Linklaters, clients rely on the breadth of our vision in this sphere and we are widely acknowledged for our commitment and expertise in advising on the risks and legal obligations arising from climate change. We understand the opportunities that carbon trading brings, the effect that energy and carbon pricing will have on your business, as well as the impact of incorporating climate change risk into your decision making.

It is the “sheer breadth” of Linklaters’ Climate Change Practice that is repeatedly singled out by satisfied clients. Chambers Europe 2008

Our team’s experience.

Climate change...is yet another area where this firm has dedicated its ‘superb resources’ to number among the ‘crème de la crème’. Chambers UK, 2007

- Acquisition of ClimateCare: advising JPMorgan Chase on its acquisition of and integration of ClimateCare into its environmental markets business, including extensive due diligence of the carbon company’s credit portfolio, considerable structuring advice and regulatory risk assessment.

- Adaptation Fund: advising the World Bank on its role as trustee and on the monetisation of the Adaptation Fund.

- CDM: advising CO2e.com, a major broker, on regulatory issues and risks arising from becoming a project participant and on its standard form escrow arrangements for holding cash and CERs.

- CDM: advising a major investment bank in relation to the operation of its standard ERPA, incorporating new regulatory changes and risks into these terms.

- CDM: advising a US hedge fund on the creation of a joint venture carbon company to develop and finance projects throughout the world.

- CDM/JI: advising carbon company Greenstream on its role of carbon manager in the EBRD’s Multilateral Carbon Credit Fund including drafting fund structure documentation employing an innovative structure to ring fence liabilities and minimise cross default risk.

- CDM/JI: advising a French investment bank on its potential equity investment in a leading global carbon company, including reviewing the carbon company’s exposure to market risk given its portfolio and business model, and extensive due diligence.

- CER: advising IFC on regulatory issues arising from trading carbon in the US, Asia and Europe.

- CER-Linked Notes: acting for Daiwa Securities SMBC Europe Limited as dealer and lead manager in relation to the USD 25m CER-Linked Notes due 2013 issued by the International Bank for Reconstruction and Development.

- CER Structured Notes: we advised Mitsubishi UFJ Securities as dealer and lead manager on the issue of CER Structured Notes by the International Bank for Reconstruction and Development.

- China CDM: advising two US investors on the acquisition of a syndicate member’s interest in a syndicate purchasing CERs from an HCFC destruction project in China - one of the largest structured acquisitions of carbon credits.

- China CDM: advising on the involvement of an international investment bank in a carbon procurement fund through the off-take of CERs.

- China CDM: advising a major investment bank on the legal documentation and liability risks in relation to its involvement in a new carbon procurement fund established by a carbon company acquisition vehicle sourcing credits from a large nitrous oxide project in China - one of the largest CDM projects registered.

- China CDM: advising an international investment bank on the acquisition of interest in an existing carbon company CER acquisition vehicle under the World Bank Umbrella Carbon Fund.

- China CDM: advising a Japanese consortium on the groundbreaking development of an HFC-23 decomposition CDM project in China for Ju-Hua and the related sale of CERs - one of the earliest CDM projects to be approved in China.

- CDM: advising banks, governments, hedge funds and corporates in relation to numerous secondary market trades and related standard form documentation.

- CDM: advising a major investment bank in relation to the regulatory issues surrounding delivery risks and settlement of CER trades and on the adoption of project participant status in different jurisdictions within the EU.

- CDM: advising the Grand Duchy of Luxembourg on its carbon procurement programme, including all legal aspects relating to its acquisition of CERs from a landfill gas project in El Salvador and three wind farm projects in China.

- CDM: advising a major broker in relation to the establishment of an auctioning platform and related documentation.

- DRC CDM: assisting a project developer in the Democratic Republic of Congo develop a CDM forestry project.

-EnergyEfficiency: we were recently appointed lead legal adviser to the Clinton Foundation in respect of its global energy efficiency and carbon reduction project, which will implement large-scale energy efficiency infrastructure to the developed and developing world, as well as the development of carbon reduction projects. We are currently advising in respect of the potential carbon value of the project.

- EU ETS: advising major energy utility BP on the novation of a book of carbon trades under an IETA master agreement to a third party.

- EU ETS: advising Billiton and Anglo American on trading documentation for EU allowances.

- India CDM: advising Noble Carbon Credits in connection with a number of trades of CERs including from HFC and fuel switching projects in India.

- JI Eastern Europe: advising JBIC and the commercial lenders on the financing of the first wind farm in Bulgaria at Kaliakra, financed in part by the revenue from the sale of emission reduction units (ERUs) under the Kyoto Protocol.

Climate change...is yet another area where this firm has dedicated its ‘superb resources’ to number among the ‘crème de la crème’. Chambers UK, 2007

- REDD: assisting two African governments in relation to REDD, forestry and land-use rights, in particular drafting laws and strategy for optimising value from forestry.

- South America CDM: advising a large chemicals company on all matters relating to the CDM and sale of CERs from its Quimobàsicos HCFC plant, one of the few developing country sellers to have been selling through an auction process.

- Secondary Market: advising a major investment bank on a secondary market trade under ISDA incorporating risk of non-delivery as a result of project failure and other CDM specific risks and regulatory matters.

- South America CDM: advising Comexhidro on the sale of CERs from three hydroelectric projects in China, including advice on particular issues in relation to the application of the World Commission on Dams criteria.

- US Emissions: advising Goldman Sachs & Co. on its groundbreaking strategic alliance with Blue Source LLC, including Goldman’s purchase of an equity stake in Blue Source LLC. The strategic alliance combines Goldman’s global leadership in commodities trading and financial risk management with Blue Source’s leading climate change portfolio.

- VERs: advising in relation to drafting standard form documentation for voluntary carbon credits for a major investment bank.

Our core team.

Ranked in the 1st Tier for Environment. Legal 500, 2007

Vanessa Havard-WilliamsPhone: (+44) 20 7456 4280Email: [email protected]

Vanessa is global head of Linklaters’ Environment Group. She advises on all aspects of environmental and climate change related work and also has experience as a commercial litigator. Vanessa has extensive experience in relation to environmental and social issues in project finance, including Equator Principles compliance, funds and M&A, and providing regulatory advice on director and lender liability in relation to sustainability issues. In relation to climate change her experience has included assisting African governments on drafting laws and strategy in relation to reducing emissions from deforestation and degradation (REDD), advising on the regulatory regime applicable to carbon capture and storage, jurisdictional variations with regard to carbon trading rules within the EU, the sale and purchase of CERs and the allocation of emissions allowances upon the sale and purchase of businesses regulated under the EU ETS.

Chris StaplesPhone: (+44) 20 7456 4876Email: [email protected]

Chris is a specialist in climate change and environment related energy regulatory issues and is recognised as one of the UK’s leading specialists in this area. He led the Linklaters’ team at the Bali COP/MOP and presented at one of the side events on drafting issues relevant to emission reduction purchase agreements. Chris advised widely on these issues in 2007 including acting for one of the acquirers in a syndicated purchase of emission rights from a Natsource managed SPV in respect of one of the largest clean development mechanism projects in China in 2007, the government of Luxembourg on its carbon procurement programme including the first CDM project to be supported by a MIGA Guarantee and a large investment bank on one of the first spot trades for CERs. He also advised JPMorgan on the acquisition of ClimateCare in 2008 and its subsequent integration into the JPMorgan commodities business. He has also spoken at Linklaters and external carbon focused seminars and writes extensively on carbon related matters, including carbon capture and storage.

Stan RenasPhone: (+1) 212 903 9335Email: [email protected]

Stan is a partner in our US Structured Finance & Derivatives practice. Stan has extensive experience in securitising financial and hard assets in both domestic and cross-border transactions. Stan’s work has historically focused on structured energy and commodity transactions, including project finance, commodity, carbon emissions, off-balance sheet and tax-oriented transactions, as well as cash-flow and market-value collateralised debt obligations (CDOs), representing issuers, arrangers and managers. In addition, Stan’s practice has recently expanded into the area of insurance products, with a particular focus on alternative risk transfer solutions, including catastrophe bonds and “side-car” transactions. Some of the more innovative transactions that Stan has worked on recently include the first secured financing of an off-balance sheet, matched-book repo dealer and a joint venture arrangement between a major investment bank and the largest holder of carbon credits. Stan also has broad capital markets experience.

John PickettPhone: (+44) 20 7456 5926Email: [email protected]

John is a partner in our London office with 12 years of experience in the clean energy sector. John leads our Green Energy Group from London advising sponsors, banks, private equity investors, funds and arrangers on the development, acquisition and financing of assets in the clean energy sector and on the trading of carbon and other clean energy projects. His experience includes leading the teams advising on a series of sector “firsts”, including domestic and cross-border portfolio financings of renewable assets, first-in-country renewable financings in a number of markets and some of the more complex syndicated carbon trades. He is also advising on the two leading Round II offshore projects in the UK.

Noah Melnick Phone: (+1) 212 903 9203Email: [email protected]

Noah is an associate in the US Structured Finance & Derivatives practice. Noah has experience representing leading financial institutions, hedge funds, investment managers, insurers and other large corporations in connection with credit, equity, FX, IR, commodity and other exotic derivatives, CLNs, structured products, whole business securitisation, repackaging, repos and related matters. Noah has acted for clients in respect of a variety of asset types including carbon credits and collateralised debt obligations. Most recently, Noah has advised the World Bank on the structures to be used for monetising the CDM Adaptation Fund.

Thomas Ng Phone: (+86) 10 6505 8590 1029Email: [email protected]

Tom specialises in projects and project finance in China and has a professional background in electrical engineering. He has also worked on multiple power and infrastructure projects. This includes advising Hansen Transmissions on their joint venture manufacturing facility in Tianjin, China to manufacture gearboxes for wind turbines; the Guangdong Zhuhai Power Station Company on the demerger of the former Guangdong Electric Power Holding Company (“GEPH”) into Guangdong Guang-dian Power Grid Group Company (the “GridCo” for Guangdong Province) and Guangdong Yue Dian Power Assets Managing Company (the “GenCo” for Guangdong Province); and on the succession of GEPH’s rights and obligations by the newly formed GridCo and GenCo.

Andy RainePhone: (+44) 20 7456 5706Email: [email protected]

Andy is an associate in the Environment Group and has advised both public and private clients on a broad range of environmental, climate change and commercial matters. He has practised in both the UK and Australia, and has also worked on international environmental legal projects with the United Nations Environment Programme in Kenya. Andy has developed strong experience in advising clients on complex carbon transactions (in compliance and voluntary markets) and in providing strategic advice in relation to climate change regulation and policy issues. Recent advice includes advising a major investment bank on the purchase of ERUs from a JI project in the Ukraine. Andy holds a Masters of Law specialising in Environmental Law and Policy from University College London.

Amy MerrillPhone: (+44) 20 7456 5289Email: [email protected]

Amy is an associate in the Environment Group who focuses on carbon trading and climate change law advice. She has considerable experience of advising in relation to emissions trading, including under the Kyoto mechanisms (CDM and JI), the EU ETS and voluntary emission reduction schemes. Amy’s most recent experience includes advising JPMorgan on the acquisition of ClimateCare, advising investment banks and carbon companies on their fund structures and structured trades, and assisting international investment banks on their CER, ERU and VER purchase agreements. Amy has contributed to legal journals, publications and conferences on the topic of climate change law and has a Masters in European Laws from the College of Europe, Bruges, with a particular focus on carbon trading. Amy participated in the 2007 Bali COP/MOP sessions and has published a number of articles on the need for legal reforms to the current CDM regime.

Rhian RobertsPhone: (+44) 20 7456 4815Email: [email protected]

Rhian is a managing associate in the Derivatives and Structured Products Group. She advises clients in relation to the structuring and documenting of a wide range of derivative transactions, including OTC credit derivatives, equity derivatives and interest rate and commodity derivatives. Rhian is heavily involved in Linklaters’ carbon finance practice and has published on the subject of emissions trading in the European Union. Recent advice includes advising Daiwa Securities SMBC Europe Limited as dealer and lead manager in relation to the USD 25m CER-linked notes due 2013 issued by the International Bank for Reconstruction and Development.

Eric Liu Phone: (+44) 20 7456 2772Email: [email protected]

Eric Liu is a Chinese law qualified associate in our Shanghai office with considerable experience in corporate and banking transactions including in relation to carbon trading contracts and carbon procurement vehicles. He advises regularly on all aspects of Chinese law with respect to project finance, joint ventures and structured investment products and also has considerable experience advising international investment banks on the conduct of business in the People’s Republic of China. Eric is fluent in Mandarin and English.

Our international team.

Lieve SwartenbrouxBrusselsEmail: [email protected]

Chin Chong LiewHong KongEmail: [email protected]

André Júdice GlóriaLisbonEmail: [email protected]

Ignacio PazMadridEmail: [email protected]

Giovanna LandiMilanEmail: [email protected]

Hugo StolkinMoscowEmail: [email protected]

Dan TyrerMoscowEmail: [email protected]

Julia VoskoboinikovaMoscowEmail: [email protected]

Sylvain PelletreauParisEmail: [email protected]

Paula ChaccurSão PauloEmail: [email protected]

Bryan ChanShanghaiEmail: [email protected]

Nathan DoddSingaporeEmail: [email protected]

Narayan IyerSingapore (India practice)Email: [email protected]

Zenya OnishiTokyoEmail: [email protected]

Hirofumi TabaTokyoEmail: [email protected]

Jonathan FarrellWarsawEmail: [email protected]

Linklaters LLP One Silk Street London EC2Y 8HQ

Telephone: ( +44) 20 7456 2000 Facsimile: (+44) 20 7456 2222

www.linklaters.com

Linklaters LLP is a limited liability partnership registered in England and Wales with registered number OC326345. The term partner in relation to Linklaters LLP is used to refer to a member of Linklaters LLP or an employee or consultant of Linklaters LLP or any of its affiliated firms or entities with equivalent standing and qualifications. A list of the names of the members of Linklaters LLP together with a list of those non-members who are designated as partners and their professional qualifications is open to inspection at its registered office, One Silk Street, London EC2Y 8HQ and such persons are either solicitors, registered foreign lawyers or European lawyers. Please refer to www.linklaters.com/regulation for important information on our regulatory position. C

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