The following is an excerpt from Practice Perspectives: Vault's Guide to Legal Practice Areas.
Matt Nesburn is a partner in the global Projects, Energy, Natural Resources and Infrastructure practice, based in Allen & Overy’s Los Angeles office. He represents companies engaged in the development, construction, financing, acquisition and disposition of solar, wind, storage and other energy projects, as well as corporate planning, debt and equity investments and divestitures in the energy sector. Matt provides advice on project design and transaction structuring at every phase of project development and financing, from project inception to equity investment to construction and permanent financing, representing sponsors, cash and tax equity investors and lenders. He also counsels clients on real estate aspects of the project development and finance transactions.
Matt is a ranked lawyer in the Chambers USA, Projects: Power & Renewables: Transactional (2020-2021); and in The Legal 500 US, “Next Generation Partners” (2020-2021), and Energy: Renewable/Alternative Power (2020-2021) and Project Finance: Advice to Sponsor (2019). He advised the sponsor on the IJGlobal North American Storage Deal of the year (2020) and was part of the group named IJGlobal’s Best Legal Advisor – Tax Equity (2020).
Describe your practice area and what it entails.
I am a member of the Projects, Energy, Natural Resources and Infrastructure (PENRI) group and specialize in renewable energy project finance. My practice is fairly evenly split between (a) acquisitions/dispositions, (b) joint ventures and equity investments, and (c) debt transactions, in each case, with respect to renewable energy projects (wind, solar, battery storage, green hydrogen, fuel cells, carbon capture, etc.) and companies. Each day brings a unique set of challenges as I am usually working on anywhere from 5 to 10 different transactions at different stages, managing different teams of lawyers. Having been in renewable energy for about 12 years now, I feel truly lucky to have chosen a legal specialty that has had the type of exponential growth that has far surpassed my own and my partners’ most enthusiastic predictions and is now front and center in all major policy discussions. I am humbled by the opportunity to make a significant and meaningful impact on arguably the most important issue facing the world today.
What types of clients do you represent? (Please feel free to list actual clients.)
My partners and I represent the spectrum of participants in renewable energy transactions, including infrastructure and energy funds, independent power producers, developers, corporate investors, private equity firms and banks. We act for them in their roles as project sponsors, cash or tax equity investors, lenders, borrowers and buyers or sellers of projects, portfolios, platforms or companies. Our clients include solar panel manufacturers like SunPower Corporation, independent power producers like AES Clean Energy, developers like Clearway, private equity firms like Apollo, Carlyle Group, CIM Group, DE Shaw and Macquarie Capital, banks, family offices and anyone looking to invest in the sector. Increasingly, we have been representing multinational companies looking to invest in the U.S. renewable energy sector because they rightly sense the incredible boom underway here. We have been helping very large foreign energy companies like Tokyo Gas, Repsol, Ørsted, JERA and Korean Electric Power Corporation invest in U.S. renewable energy projects, buy U.S. renewables companies and finance, and construct and operate the assets they acquire over time.
What types of cases/deals do you work on?
One of the reasons that I like representing developers/sponsors in this space is that we are often involved in a project from “cradle to grave”, meaning we will often represent a client in purchasing a development asset that may be comprised of some or all of the following: parcels of land that are permitted for the project; the rights to interconnect that project into the electrical grid to deliver the power that will be produced; a power purchase agreement to sell the power that the project will generate; and the basic contracts to construct the project, such as a solar module purchase agreement, a construction contract and the land leases and easements that comprise the project site. We will conduct diligence on the existing contracts and negotiate the ones that are not in place yet (or renegotiate the ones that need to be modified). Once the project is far enough along in the development cycle, we will represent the client in a construction loan to provide the funds to build the project and simultaneously, we will represent the client in a “tax equity” transaction, which is a joint venture with a company (usually a bank) whereby that “tax equity investor” invests cash into the project and in return is allocated the majority of the federal and sometimes state tax credits and incentives. Then, years later, we may help the same client sell the project or sell partial equity stakes in the project.
How did you choose this practice area?
I fell into it. Initially I practiced real estate finance law for about five years. I had never heard of project finance until a legal recruiter presented with the opportunity to interview with a well-known project finance group looking for a real estate lawyer to help run the real estate portions of large wind farms that their clients were developing (at that time solar was still too expensive to be practical at scale). Little did the firm know that I was more of a finance lawyer in the real estate industry than a “dirt” lawyer who knew my way around leases and easements. I took the job and found myself quickly negotiating all of the real estate contracts for the largest wind farm in the world at the time. Over time, I found that my real estate finance background was very analogous to the joint ventures and debt transactions we were working on, and I was able to grow from being the real estate specialist to being the corporate deal lead.
What is a typical day like and/or what are some common tasks you perform?
A typical day is extremely varied, because I work on so many different concurrent transactions that may be at all different stages. Today, for example, I spent part of the day working with a client that is looking to invest capital into a start-up company developing a project with a proprietary technology to burn garbage to generate electricity and then transform that electricity into hydrogen. I also worked with a developer that is developing a 500 MW solar project in negotiating with its tax equity investors to modify the deal that we negotiated a year ago, because supply shortages stemming from the pandemic have resulted in the solar panels they purchased for half the project being extremely delayed. I worked with another client on structuring an investment offering that they are about to go to market with to raise approximately $1 billion to build two phases of one of the largest permitted solar projects in the world. I drafted a term sheet for another client for a tax equity transaction for a large wind farm and worked on a construction loan for the same project. Meanwhile, the teams that I am overseeing closed two solar financings today.
What training, classes, experience, or skills development would you recommend to someone who wishes to enter your practice area?
I would take contract negotiation and transaction-related classes to learn how typical contracts work and also classes on secured transactions and mergers and acquisitions law. If there are classes on energy law or project finance, those would be valuable. There are a few project finance legal guides that provide a decent foundational education. While all of that can provide a head start, none of it is necessary. Good lawyering skills, good personal skills and a desire to succeed are all that is needed.
What do you like best about your practice area?
The sense of purpose that comes with making meaningful contributions to fight climate change every day is something I never take for granted. The work is challenging, varied and constantly evolving to incorporate new technologies, new financing structures, new regulatory structures and a constantly changing landscape of issues to help clients overcome in bringing their projects or investments to fruition. The collaborative nature of the transactions fits my personality. Generally everyone is working toward a common goal, and while we might argue over who is best positioned to take a particular risk, it is almost always done in a constructive atmosphere. I think part of the reason is that renewable energy finance players engage in quite a bit of repeat business with each other; so maintaining a reputation for being collaborative and a good partner has real value in our marketplace.
What is unique about your practice area at your firm?
A&O is truly a global firm and is by many measures the world leader in project finance. The firm is very good about sharing knowledge and resources across the platform, which is important because certain technologies like offshore wind farms are prevalent in Europe but are in their infancy here in the U.S. We are able to leverage that experience to stay one step ahead of the competition. The global reach of the firm has led to introductions to existing foreign clients of the firm looking to invest in the U.S. renewables market and has resulted in many significant deals that we are currently engaged on.
What are some typical tasks that a junior lawyer would perform in this practice area?
Juniors often begin by managing the deal checklist and keeping track of the status of the various contracts being negotiated and deliverables required in order to close a transaction. This gives them a great perspective on all of the moving pieces and allows them to develop a sense of how everything fits together. They will then graduate into drafting shorter documents like a two- or three-page certificate or assignment agreement. They will correspond by email and on conference calls/video calls with opposing counsel and the client to help shepherd the deal toward closing. Young associates will participate in meetings where the substantive deal points are strategized with the client or negotiated with the other side, and they will keep the official notes and turn them into a document that might be shared with opposing counsel. After a year or two, they will be drafting larger documents or portions of documents. Often young associates will perform diligence on contracts, reading them and identifying issues based on criteria they have been provided.
How do you see this practice area evolving in the future?
Renewable energy is going continue to grow exponentially and lawyers are necessary to enable that growth. The speed of change as new technologies are adopted and government is harnessed to accelerate that growth will only increase. It will take agility to stay ahead of the trends but there will be no shortage of rewarding legal work to do, and we need as many young dedicated lawyers as possible to pick up the mantle.