Thursday, December 3, 2015

#TBT: Power Contracts and Bankrupt Generators


This post is part of an occasional series highlighting a project finance article or news item from the past. It is often interesting and thought provoking to look back on these items with the perspective of months, years or decades of further experience. 

With this installment, we turn to an article that was published in the January 2009 issue of the Project Finance NewsWire.




Power Contracts and Bankrupt Generators

US courts in different parts of the country have reached different conclusions about whether it is up to the bankruptcy judge or the Federal Energy Regulatory Commission to decide when a power contract with unfavorable terms can be canceled in a bankruptcy proceeding.

Thursday, November 12, 2015

#TBT: Are Subsidiaries Really Bankruptcy Remote?


This post is part of an occasional series highlighting a project finance article or news item from the past. It is often interesting and thought provoking to look back on these items with the perspective of months, years or decades of further experience. 

With this installment, we turn to an article that was published in the October 2005 issue of the Project Finance NewsWire and was co-written by Christy Rivera, counsel in Chadbourne's Bankruptcy group.



Are Subsidiaries Really Bankruptcy Remote?

BY N. THEODORE ZINK, JR. AND CHRISTY RIVERA

A US appeals court decision in August is a reminder to lenders that there is a danger that even a “bankruptcy remote” borrower can have its assets swept up in a bankruptcy proceeding involving a parent company or other affiliate.

A bankruptcy court might “substantively consolidate” the borrower with the company in bankruptcy.

Friday, November 6, 2015

Clean Power Plan: Five Things to Know About the Clean Energy Incentive Program

Sue Cowell, in Washington



While everyone is keeping an eye on how the Clean Power Plan litigation plays out, developers of wind, solar, and demand-side energy efficiency projects are also very interested in monitoring, and helping shape the development of the Clean Energy Incentive Program (CEIP). 

By way of background, the Clean Power Plan requires a 32 percent reduction in CO2 emissions from affected existing electrical generation units by 2030.  States are to prepare implementation plans describing how they will achieve their obligations under the Clean Power Plan; however, the EPA will implement a federal plan for those states that don't submit a plan, or fail to get EPA approval of their plans. 

Friday, October 30, 2015

Clean Power Plan – Court Sets Schedule for Stay Requests


by Sue Cowell, in Washington


None of the requests to stay the Clean Power Plan will be heard until after the international climate change talks wrap up in Paris. This means that the Obama administration is assured that the Clean Power Plan will be intact during the talks, which are being held from November 30 through December 11, 2015. 

Monday, October 26, 2015

Clean Power Plan – 19 Separate Petitions for Review Already Filed

by Sue Cowell, in Washington

As expected, publication of the Clean Power Plan in the Federal Register on Friday started a firestorm of litigation. A total of 19 petitions for review of the Clean Power Plan were filed by 26 states and a number of other interested parties. Friday marked the first day of the 60-day period to file petitions for review by the US Court of Appeals for the DC Circuit. Here's the list of petitions that were filed on Friday along with the assigned case numbers:

  • States. Alabama, Arizona, Arkansas, Colorado, Florida, Georgia, Indiana, Kansas, Kentucky, Louisiana, Michigan, Missouri, Montana, Nebraska, New Jersey, North Carolina, Ohio, South Carolina, South Dakota, Texas, Utah, West Virginia, Wisconsin, and Wyoming. All of these states joined in the lawsuit brought by West Virginia and Texas (No. 15-1363). The states of North Dakota (No. 15-1380) and Oklahoma (No. 15-1364) each filed separate lawsuits.

Friday, October 23, 2015

Clean Power Plan – A Firestorm of Litigation Expected as Planning Continues at the State Level


by Sue Cowell, in Washington

The EPA expects a firestorm of litigation following the publication of the Clean Power Plan in the Federal Register today.  Prior lawsuits, the latest involving 15 states, had been dismissed as being premature.  The EPA also published its final carbon dioxide emissions rule for new, modified, and reconstructed power units, as well as its proposed federal implementation plan that EPA will impose on states that don't submit an approved implementation plan to comply with the Clean Power Plan.  The comment period to the federal plan ends on January 21, 2016.

Thursday, October 22, 2015

#TBT: US Trade Sanctions Are a Trap for the Unwary



This post is part of an occasional series highlighting a project finance article or news item from the past. It is often interesting and thought provoking to look back on these items with the perspective of months, years or decades of further experience. 

With this installment, we turn to a transcript that was published in the April 2007 issue of the Project Finance NewsWire featuring Christopher Man, counsel in Chadbourne's Litigation group and Keith Martin, a partner in Chadbourne's Project Finance group. 


US Trade Sanctions Are a Trap for the Unwary


The United States maintains trade sanctions of varying severity against dozens of countries. Anyone doing business with sanctioned countries must be careful not to violate them.The sanctions not only vary from country to country, but they also change periodically.

Thursday, October 15, 2015

#TBT: US Inbound Investment Strategies For Renewable Energy



This post is part of an occasional series highlighting a project finance article or news item from the past. It is often interesting and thought provoking to look back on these items with the perspective of months, years or decades of further experience. 

With this installment, we turn to a transcript that was published in the November 2011 issue of the Project Finance NewsWire featuring Keith Martin, partner in Chadbourne's Project Finance group. 



US Inbound Investment Strategies For Renewable Energy


A new wave of Chinese, Spanish and some other European and Latin American companies is investing in US renewable energy projects. Much of the attention is focused on the solar sector, but there have also been some notable recent purchases of interests in operating wind farms and other wind projects nearing the start of construction.

Thursday, October 1, 2015

#TBT: Prepaid Power Contracts


This post is part of an occasional series highlighting a project finance article or news item from the past. It is often interesting and thought provoking to look back on these items with the perspective of months, years or decades of further experience. 

With this installment, we turn to a Special Update that was published in the September 2012 issue of the Project Finance NewsWire written by Chadbourne partner and co-head of the Project Finance Group, Keith Martin.

Prepaid Power Contracts

Developers are taking another look at prepaid power contracts as a way of reducing the cost of capital for utility-scale renewable energy projects. 

Wednesday, September 30, 2015

Wind Projects and Bats


by Sue Cowell, in Washington
Under federal environmental law, bat species are not afforded legal protection unless covered under the federal Endangered Species Act (ESA). Under the ESA it is unlawful to "take" (e.g., harm, harass or kill) any federally endangered or threatened species.  Examples of bat species that are covered by the ESA are the Indiana bat (endangered) and the Northern long-eared bat (threatened). Under some circumstances, the United States Fish & Wildlife Service may authorize the "take" of such species by issuing an Incidental Take permit. 


Thursday, September 24, 2015

#TBT: Lessons from the Last Rush to Start Construction

This post is part of an occasional series highlighting a project finance article or news item from the past. It is often interesting and thought provoking to look back on these items with the perspective of months, years or decades of further experience. 

With this installment, we turn to a Special Update that was published on December 17, 2014, written by Chadbourne partner and co-head of the Project Finance Group, Keith Martin.


Lessons from the Last Rush
to Start Construction

The Senate vote last night to let developers of wind, geothermal, biomass, landfill gas, incremental hydroelectric and ocean energy projects claim tax credits on projects on which they start construction by year end has four effects.

The expectation that the Senate would act set off a scramble starting earlier this month to take delivery of additional equipment from wind turbine manufacturers that might be used as a basis to treat more projects as under construction in time as well as a search for excavation and road contractors who can get to work on project sites before year end.

There are a number of lessons to take away from the last rush to start construction at the end of 2013.

The extension is part of a broader tax extenders bill that passed the House on December 3.
The Senate passed the identical bill shortly before adjourning for the year on December 16. President Obama is expected to sign it.

The bill will allow developers to claim 10 years of production tax credits on the electricity output from new projects that are under construction by December 31, 2014. (The previous deadline had been the end of 2013.)

The bill also preserves the option to claim a 30% investment tax credit on the project cost instead of production tax credits. Any investment credit is claimed in full in the year the project is put in service.

The bill extends a 50% depreciation bonus on new equipment put in service by December 31, 2014. (The bonus can also be claimed on some projects that are not completed until December 2015, but only on the tax basis built up through 2014.) The bonus is the ability to deduct 50% of the eligible basis in equipment immediately and deduct the other 50% over the normal depreciation period. The bonus was originally conceived as a carrot to induce companies to buy more new equipment. It expired at the end of 2013. Extending it at the end of the year retroactively to January 1 makes it little more than a windfall for investments to which companies would already have had to have committed by now.

Congress folded a series of technical corrections to recent tax laws into the extenders bill. One technical correction is important to some renewable energy companies. Congress gave renewable energy developers the option during the period 2009 through 2011 (and longer for projects that were under construction in 2011) to be paid 30% of the project cost instead of claiming tax credits. This was after the economy collapsed and the tax equity market shut down, making it hard to raise tax equity to finance new projects. The US Treasury acted essentially as the tax equity investor of last resort. Congress made clear that these “section 1603 payments” did not have to be reported as taxable income by recipients of the payments. However, there are two corporate income tax systems in the United States – corporations calculate their regular corporate income taxes and alternative minimum taxes and pay essentially whichever amount is greater – and the law creating the Treasury cash grant program failed to make clear that the section 1603 payments do not have to be reported as income by companies paying alternative minimum taxes. The tax extenders bill fixes this retroactively as if it had been clear from the start. The Internal Revenue Service had gotten tired of waiting for Congress to fix the statute and was starting to collect taxes from AMT taxpayers.


Significance

The most significant effect of extending the deadline to start construction is it should make it easier to claim tax credits on wind, geothermal, biomass, landfill gas, incremental hydroelectric and ocean energy projects that are completed in 2016. Developers should be able to claim tax credits on projects that are completed in 2015 or 2016 without the need to prove that the developer worked continuously on the project.

There are two ways to start construction this year. One is by “incurring” at least 5% of the final project cost. Costs are not incurred merely by spending money. The developer must either take delivery of equipment this year or else pay this year and take delivery within 3 1/2 months after payment. Delivery can be at the factory. The IRS modified the 5% threshold in August 2014 to say that a wind developer who incurs at least 3% of the final project cost can claim tax credits on a fraction of the electricity output or project cost. At 3%, the project would qualify for 60% of the normal tax credits. At 4%, it would qualify for 80%.
The other way to start construction is to commence “physical work of a significant nature” at the project site or at a factory on equipment for the project. The IRS has interpreted the physical work test in a liberal manner so that not much must be done in 2014. However, many tax equity investors have not been as keen to finance projects that rely on physical work.

It is not enough merely to have started construction in time to qualify for tax credits. There must also be continuous work on the project after the construction start deadline. The IRS said in a notice in September 2013 that it will assume there was continuous work on any project that is completed by December 2015.

IRS and Treasury officials are talking about whether to issue a new notice extending the continuous-work presumption through 2016. A preliminary decision should be made shortly, although a new notice could take months.

If at all possible, start construction by incurring costs rather than relying on physical work.
The IRS takes the position currently that if one turbine at a 50-turbine wind farm slips into 2016, then the developer must prove continuous work on the entire project. The same principle should apply – assuming the IRS extends the continuous-work presumption through 2016 – if one turbine slips into 2017. The IRS gives the developer the benefit of treating the entire project as under construction in time based on incurring a fraction of the cost or starting physical work on a small piece of the project. Therefore, it also treats the project as a single project for assessing at the back end whether the project made it into service in time to benefit from the continuous-work presumption.

Another effect of the extension in the construction start deadline is some developers should be able to start construction of a few more projects by year end. Several larger developers began negotiating in early December to take delivery of more equipment from wind turbine manufacturers. Some manufacturers may have inventory or spare capacity that could be put to use quickly. A recent report by Navigant Research put worldwide demand for wind turbines in 2014 at 47,000 megawatts against a manufacturing capacity of 71,000 megawatts.

Some smaller developers who do not have the money to pay today for equipment are trying to mobilize excavation or road contractors to dig turbine foundations or put in roads on project sites before year end. Weather could be a factor at some sites.

The extension may put developers who relied on the physical work test to start construction of projects in 2013 in a stronger position to persuade tax equity investors and lenders that the physical work is significant if more work was done on the project in 2014 or can be done before year end. The American Wind Energy Association estimated that more than 12,000 megawatts of wind farms were under construction by the end of 2013. There were very rough estimates that at least 4,000 megawatts of these projects relied on the physical work test. The facts varied from one project to the next.

Some larger developers stockpiled equipment in 2013 that could be used in future projects. As long as the equipment actually used amounts to at least 5% of the final project cost and there was continuous work on the project after the construction start deadline, then the project qualifies for tax credits. The IRS has been concerned about trafficking in 2013 stockpiled equipment. Under IRS rules, Developer A holding such equipment could transfer it to Developer B for use by Developer B as a basis for claiming tax credits, but only if Developer A contributes the equipment for more than a 20% interest in Developer B’s project. The short extension in the construction start deadline opens a very short window for developers holding 2013 equipment to sell it to other developers who can count the costs as incurred 2014 costs in their own right.


Lessons

A number of lessons should be taken away from the last rush to start construction in 2013.
Developers with projects that are not completed until after 2016 will have to prove continuous work to claim tax credits. This is easier to do for projects that rely on the 5% test than for projects that rely on physical work. A developer must show “continuous efforts” on any project that was under construction based on incurred costs. He or she must show “continuous construction” for any project that was under construction based on physical work. “Continuous efforts” contemplate that the project can still be merely under development; thus, development-type tasks like working to secure permits, a project site and an interconnection agreement and negotiating with vendors, financiers and construction contractors count as continuous efforts. “Continuous construction” contemplates that a project is truly under construction. This may be hard to do for a wind farm on land with a normal construction period of six to eight months if the project is not completed until 2017 or later.

Anyone relying on continuous efforts should document the effort. The development team should come in every Monday morning and ask what it can do that week to advance the project, work at it, and keep detailed logs showing what was done from one day to the next on the project. It does not matter if the project is expected to be completed in time to benefit from the presumption that there was continuous work. The documentation is an insurance policy in the event the construction schedule slips.

If physical work is the only option, then it is better to dig turbine foundations or put in turbine string roads than to do minimal work on transformers or other equipment at a factory. If at all possible, dig at least 10% of the turbine foundations. Finish more than a mile of road to the permanent surface. If possible, clear or plot out the remaining roads. Access roads that allow entry on to the project site from the public highway do not count; what counts are string roads that connect one turbine to the next. While the IRS declined in August to draw a bright line around what qualifies as “significant” physical work, it made clear that not much had to be done. However, the tax equity market has been less keen to finance projects that rely on minimal physical work. This is particularly important given that 2016 is expected to be a very busy year for tax equity due to competition from solar companies rushing to complete solar projects before the December 2016 deadline to qualify for a 30% investment tax credit. Tax equity investors will have more projects from which to choose than there is available capacity. They will choose the ones that present the fewest tax risks; therefore, the stronger the physical work facts, the better.

The developer must have a binding contract in place with the construction contractor before physical work starts for the contractor to do the work and for the developer to pay for it. The contract does not have to be for the full job: for example, it can be for excavating just a fraction of the turbine foundations.

It is not a good idea for the developer to retain a right to terminate the contract for convenience. That may turn the contract into merely an option to have the work done, even if the developer is required to pay for the work that has been completed before cancellation. The safest course is to require payment of at least 5% of the total contract price in damages.

Anyone relying on physical work should document the work that was done before year end. Take photos of the site. Have an independent observer visit the site at year end and attest to what he or she saw.

The 3 1/2-month rule – where the developer pays in 2014 for equipment that will be delivered within 3 1/2 months of payment – is a “method of accounting.” Not every company can use it. A developer should confirm with its accountant that it can use this approach. Forming a partnership may help, as the partnership is allowed to choose a new method of accounting without having to get IRS permission to change its accounting method.

It does not work to give a turbine vendor a recourse note this year for equipment to be delivered within 3 1/2 months of payment. The IRS requires “payment” in 2014 if equipment is to be delivered in early 2015. It defines “payment” as “cash or cash equivalent.” What the IRS had in mind by a cash equivalent is a debt instrument for which there is an active market: for example, corporate debt traded on an exchange. Case law suggests a note can be a cash equivalent, but only if four things are true about it. The note must bear an arm’s-length rate of interest, it must be freely transferable, it must be a kind for which there is an active market so that it is easily convertible into cash, and any discount at which it trades should only reflect changes in the cost of money rather than the likelihood of payment by the obligor.

When taking delivery at the factory, make sure that both title and risk of loss transfer. The developer should pay storage fees and buy casualty insurance while the equipment is being stored. Have a delivery certificate showing someone inspected the equipment on behalf of the developer. If the vendor charged for future transportation to the project site as part of the equipment price, back it out of the 2014 incurred costs. Transportation is a service, and the cost of services is not incurred until the services are fully performed. The same principle applies to a prepaid storage fee that is built into the price of the equipment. Make sure any sales taxes that must be paid after a real sale and delivery are paid. Segregate the equipment from other equipment belonging to the vendor, especially if the vendor is pulling the equipment out of inventory, and tag it as property of the developer. If the equipment is defective, it is better for the vendor to repair it under warranties rather than to reject the equipment so that the cost of the equipment continues to count as a 2014 cost. 

Thursday, September 17, 2015

#TBT: Financing Projects with Unproven Technologies



This post is part of an occasional series highlighting a project finance article or news item from the past. It is often interesting and thought provoking to look back on these items with the perspective of months, years or decades of further experience. 

With this installment, we turn to a transcript that first appeared in the November 2006 issue of the Project Finance NewsWire.


Financing Projects with Unproven Technologies

Many new projects are coming to the market for financing after a lull of several years. The next wave of new construction is not like the boom years of the 1980s and 1990s when most large transactions in the project finance market involved power plants that burned either natural gas or coal and used proven technologies. Many more technologies are competing for attention in the current market. Projects that involve new ways of making transportation fuels or generating electricity or that rely on equipment that does not have a long operating history can be severely challenging to finance.
       Four veterans of the project finance market discussed the challenges facing such projects in October. The panelists are Herb Magid, managing partner of Energy Investors Funds, a group of six private equity funds that has been a source of capital for many smaller project developers, John McKenna, managing director of Hamilton Clark & Co., an investment bank that helps smaller companies raise capital and list on the AIM market in London, Jerome Peters, senior vice president and group head of project finance for TD Banknorth, N.A., a prominent lender in the renewable energy and biofuels markets, and Paul Ho, director of global energy at Credit Suisse, which has been acting as the financial adviser on many innovative financings. The moderator is Keith Martin with Chadbourne in Washington.
  

Thursday, September 3, 2015

#TBT: DOE Releases Guidelines for Loan Guarantees


This post is part of an occasional series highlighting a project finance article or news item from the past. It is often interesting and thought provoking to look back on these items with the perspective of months, years or decades of further experience. 

With this installment, we turn to an article that first appeared in the September 2006 issue of the Project Finance NewsWire.

This article is particularly timely as President Obama announced in late August that the DOE will make another $1 billion in federal loan guarantees available for commercial-scale distributed energy projects, such as micro-grids and rooftop solar with batteries, President Obama.  The loan guarantees will be offered under the existing US Department of Energy loan guarantee program.  The additional $1 billion earmarked for commercial-scale distributed energy will be split equally between two existing solicitations, including the solicitation issued July 2014 for up to approximately $4.2 billion in loan guarantees for renewable energy projects and the solicitation issued in December 2013 for up to $8 billion in loan guarantees for advanced fossil energy projects.  


Ken Hansen, in Washington, is our resident DOE loan guarantee expert.


Wednesday, September 2, 2015

In case you missed it, "What to Ask on Diligence in the Wake of the Clean Power Plan"

Last week, Chadbourne lawyers Sue Cowell and Richard Waddington led a discussion on diligencing projects in light of the U.S. Government's Clean Power plan.

The US government is asking each state to come up with a plan to reduce carbon dioxide emissions from power plants. The amount varies by state. Overall, a 32% drop in carbon dioxide emissions compared to 2005 levels is required by 2030. Fossil fuel-fired power plants are being built, financed, and refinanced despite pending litigation, speculation about how the Clean Power Plan will fare with a new administration, and speculation about how, or even if, some states will implement the plan. 

Thursday, August 27, 2015

#TBT: Project Sales: Traps for the Unwary

This post is part of an occasional series highlighting a project finance article or news item from the past. It is often interesting and thought provoking to look back on these items with the perspective of months, years or decades of further experience. 

With this installment, we turn to an article that first appeared in the February 2003 issue of the Project Finance NewsWire and was written by Chadbourne partner and head of the corporate practice, Allen Miller.

This article is particularly timely as we are seeing more emphasis on project M&A, due in part to the seemingly insatiable appetite of yieldcos for new assets. There is more liquidity in projects than in quite some time.  Companies that typically hold and operate assets are thinking about selling due to higher valuations.  Companies that typically sell assets are finding the process a little smoother.  


Thursday, August 20, 2015

#TBT: Clinton Proposes Tax Changes Affecting Project Finance, March 1999


This post is part of an occasional series highlighting a project finance article or news item from the past. It is often interesting and thought provoking to look back on these items with the perspective of months, years or decades of further experience. This article first appeared in the March 1999 issue of the Project Finance NewsWire and was written by Chadbourne partner Keith Martin.


Clinton Proposes Tax Changes Affecting Project Finance


by Keith Martin, in Washington

The Clinton administration proposed a series of tax law changes in February that, if enacted, would affect project finance. 

Thursday, August 13, 2015

#TBT: Cuban Sanctions

This post is part of an occasional series highlighting a project finance article or news item from the past. It is often interesting and thought provoking to look back on these items with the perspective of months, years or decades of further experience. This article first appeared in the August 2001 issue of the Project Finance NewsWire and was written by former Chadbourne counsel Samuel Kwon.


Cuban Sanctions


President Bush decided in July to continue blocking civil suits by US persons against anyone dealing in property confiscated from Americans by Cuba during and after the
1959 revolution.

The so-called Helms-Burton Act, enacted in 1996, allows US persons to sue in the US courts for damages against anyone — a US person or otherwise — “trafficking” in property confiscated by Cuba on or after January 1, 1959. However, it also allows the President to suspend the provision at six-month intervals. President Clinton suspended the provision soon after it was enacted after Canada and various countries in Europe complained about the extra-territorial reach of the prohibition. The Bush administration decided in July to continue this policy.

Thursday, July 30, 2015

#TBT: Mexico: The Morning After



This post is part of an occasional series highlighting a project finance article or news item from the past. It is often interesting and thought provoking to look back on these items with the perspective of months, years or decades of further experience. This article first appeared in the March 1999 issue of the Project Finance NewsWire and was written by the late John B. O' Sullivan, a former Chadbourne partner.

Mexico: The Morning After

By John B. O'Sullivan, in Washington

Mexico has been attracting a lot of attention from independent power plant developers recently, both in bidding on requests for proposals from the national utility, the CFE, and in pursuing inside-the-fence projects.
The announcement by President Zedillo last month that the government intended to restructure the electric industry so as to greatly enhance the opportunities for foreign investors and operators seemed at first blush as though it would only further increase that number of players and scope of interest by developers and, therefore, lenders, even in the face of volatile Latin American financial      markets. However, a better appreciation of the difficulty of the process on which the government is embarking, aggravated by the opposition to the plan by some important forces in Mexico, and a reflection on how a good plan for the long run may complicate matters in the short run have somewhat tempered the reaction of many developers and other observers inside and outside of Mexico.

Thursday, July 23, 2015

#TBT: Financing Projects with Unproven Technologies



This post is part of an occasional series highlighting a project finance article or news item from the past. It is often interesting and thought provoking to look back on these items with the perspective of months, years or decades of further experience. This article first appeared in the November 2006 issue of the Project Finance NewsWire.


Financing Projects with 
Unproven Technologies

Many new projects are coming to the market for financing after a lull of several years. The next wave of new construction is not like the boom years of the 1980s and 1990s when most large transactions in the project finance market involved power plants that burned either natural gas or coal and used proven technologies. Many more technologies are competing for attention in the current market. Projects that involve new ways of making transportation fuels or generating electricity or that rely on equipment that does not have a long operating history can be severely challenging to finance. 
  Four veterans of the project finance market discussed the challenges facing such projects in October. The panelists are Herb Magid, managing partner of Energy Investors Funds, a group of six private equity funds that has been a source of capital for many smaller project developers, John McKenna, managing director of Hamilton Clark & Co., an investment bank that helps smaller companies raise capital and list on the AIM market in London, Jerome Peters, senior vice president and group head of project finance for TD Banknorth, N.A., a prominent lender in the renewable energy and biofuels markets, and Paul Ho, director of global energy at Credit Suisse, which has been acting as the financial adviser on many innovative financings. The moderator is Keith Martin with Chadbourne in Washington.

Thursday, July 16, 2015

#TBT: US Congress Throws Tax Benefits At Project Finance Community

This post is part of an occasional series highlighting a project finance article or news item from the past. It is often interesting and thought provoking to look back on these items with the perspective of months, years or decades of further experience. This article first appeared in the September 1999 issue of the Project Finance NewsWire.

US Congress Throws Tax Benefits At Project Finance Community

by Keith Martin, in Washington

Congress left Washington in early August after passing a $792 billion tax-cut bill with many provisions that are of interest to the project finance community. The bill faces a certain veto by President Clinton.

The real question is whether Republican Congressional leaders and the president will negotiate a smaller tax cut in the fall. If so, then the bill Congress passed will serve as a high-water mark for the negotiations. Here is what is in it that would affect companies involved in power, telecoms, toll roads and other infrastructure projects.