The following is an excerpt from Practice Perspectives: Vault's Guide to Legal Practice Areas.
Roland Estevez is a partner in Milbank’s Global Project, Energy, and Infrastructure Finance group in New York. Mr. Estevez’s practice is primarily focused on the representation of financial institutions, multinational corporations, and developers across a broad spectrum of sectors, including renewable and conventional power, social and transportation infrastructure, and mining throughout the Americas and particularly in Latin America. He is recognized as a leading project finance lawyer by Chambers Latin America, Chambers USA, and The Legal 500.
Carolina Walther-Meade is a partner in Milbank’s Global Project, Energy, and Infrastructure Finance and Latin America Practice groups and is consistently recognized as a leading project finance lawyer by Chambers Latin America, Chambers USA, and Legal 500 Latin America. She has extensive experience representing clients in cross-border financings and international project finance and development, with an emphasis on transportation, oil and gas, infrastructure, mining, and energy projects throughout Latin America. Many of these transactions have been recognized as “Deals of the Year” by publications such as IJGlobal and LatinFinance.
Describe your practice area and what it entails.
We advise clients in the structuring and execution of highly structured financings involving projects and assets in the renewables and clean technology sectors. Project finance generally focuses on the financing of a specific project in which lenders or investors look principally to the revenues generated by the operation of such projects for the source of funds from which loans will be repaid and investments returned (e.g., revenue from the sale of power from wind and solar plants or utility battery projects). The primary security for the loans consists of the assets of the project, including—most notably—the cash flow generated thereby and the contracts that assure the stability of the project’s costs and revenues. This type of structured finance is often deployed in the development of large infrastructure projects that provide clean technology and renewable energy sources.
What types of clients do you represent?
We generally represent developers, private equity sponsors, investors, debtors and creditors, and other major parties in both domestic and cross-border transactions. Our clients include Google, Breakthrough Energy, Equinor, Onward Energy, Amp Energy, and Brookfield. We also represent newly formed private equity funds or startup developers looking to develop an innovative, clean energy solution.
What types of cases/deals do you work on?
Our clients are involved in high-profile projects involving some of the largest transactions in the energy and infrastructure sectors across the globe. Over the last few years, we have acted as legal advisor in more than 300 transactions that have raised almost $200 billion of limited and non-recourse debt for a wide variety of renewables and conventional power, energy, infrastructure (including transportation and digital), metals and mining, and other large-scale infrastructure projects. Our expertise extends to asset acquisition, restructuring, portfolio securitization, and political risk mitigation techniques, making for a very interdisciplinary practice and a vital component of the global energy transition we are experiencing.
How did you choose this practice area?
Roland: As a summer associate, I found myself working on the financing of a project that involved the construction and launch of a communications and imaging satellite for a leading global launch services company. To me, the identification and allocation of the risks required in executing such an endeavor was the ultimate challenge and reinforced my choice in career and field of energy and infrastructure law. Milbank—and its clients—puts you at the forefront of pioneering new and innovative technology. I constantly find myself and my team challenged to think creatively and develop new skill sets. The skills learned and sector expertise gained at Milbank are focused on allowing its lawyers to advise clients on bet-the-company transactions both domestically and globally.
Carolina: Project finance—particularly in the renewables sector and, most recently, in the energy transition space—was a natural fit for my interest in international work. I enjoy working with clients either located in or developing projects throughout the Latin America region (and I appreciate the daily opportunity to speak Spanish and Portuguese!). The development aspect of this practice is also very appealing to me. By representing infrastructure and energy project developers, we are supporting projects that provide foreign investment and other benefits to the countries in which they’re located. For example, when we advised Cerro Dominador on the financing for its concentrated solar power plant in Chile, a first-of-its-kind project in Latin America, we supported our client in helping to incentivize green electricity generation in Chile through state-of-the-art technology.
What is a typical day like and/or what are some common tasks you perform?
Roland: My work depends largely on the stage or phase of the particular transactions I am working on. One day, I could be advising a developer in the construction phase of an industrial-scale water desalinization plant in southern Chile or a private equity fund looking to invest in residential solar portfolios of a U.S. solar company. It is also not unusual to find myself in Bogotá, Rio de Janeiro, or Beijing negotiating a transaction, restructuring an existing deal, or speaking at an energy transition conference (sometimes in the same week!).
Carolina: Every day is different! But most include a negotiation with anywhere from 5 to 30-plus people, whether with a group of clients (either developers, financial sponsors or strategic partners, or diverse financing providers) or counsels (both counsel for the other side as well as local counsel). I also spend time strategizing with my team on deal management and training. Often, our teams are made up of Milbank attorneys across our London, Asia, or São Paulo offices, which further adds to the international element of my work. My days are also spent reviewing documents prepared by associates, and we discuss my revisions and their rationale to collectively ensure that the documentation achieves what our client wants and that our deal team understands why.
What training, classes, experience, or skills development would you recommend to someone who wishes to enter your practice area?
Roland: No single path will lead you to a career in the energy and infrastructure finance practice. The group at Milbank is comprised of individuals from diverse and varied academic as well as personal backgrounds. That said, I would advise seeking out academic exposure in secured transactions and bankruptcy, which would certainly facilitate developing the tools required to analyze, negotiate, and allocate risks properly within a transaction. Nonetheless, nothing replaces the work experience and client exposure one gains early on in their careers to develop and strengthen those skills.
Carolina: Fortunately, junior associates are not expected to know how to structure a project finance deal—this is the kind of expertise you will acquire “on the job”! That said, a class on secured transactions, capital markets, project finance, and perhaps restructuring can be helpful in teaching you the general framework and terminology in these areas of the law. More holistically, a junior associate would benefit from having a detail-oriented focus, good communication skills, and a willingness to ask questions.
What is the most challenging aspect of practicing in this area?
The best thing about our practice is also the most challenging. You are constantly pushed out of your comfort zone as a result of the varying nuances from project to project and client to client. Financing a hydropower plant in Peru or developing a thermal plant in Laos is very different from financing an offshore wind project in the U.S. The practice is a dynamic one that requires one to always stay at the forefront of technology and even lead the way as your clients venture into new sectors.
What misconceptions exist about your practice area?
In the past, we found that the inclusion of the word “finance” in the name dissuaded candidates without a business background from inquiring into our practice and did not convey the broad scope of what we do. In reality, we are equally as likely to find ourselves negotiating a construction and engineering contract, a guaranty, a political risk insurance policy, or a Mexican fiduciary trust as we are a loan document. Hands-on experience, client interaction, and our professional development programs will give you the finance tools you will need to be successful. We recently changed the name of our practice area to the Global Project, Energy and Infrastructure Group, to signal the breadth of our practice area and the fact that it ranges from clean tech and renewable energy to digital infrastructure and the energy transition, among others. Our practice is concentrated in energy and infrastructure, but associates learn that the work within these industries is extremely broad and affords the added challenges of working in different sectors and jurisdictions and on cross-border transactions.
What is unique about your practice area at your firm?
The breadth of knowledge that an energy and infrastructure finance attorney must master extends far beyond the legal aspects of a transaction. In order to make the many complicated aspects of each unique transaction come together, it is incumbent upon us to have a working knowledge of the technology, industry, and country (including its political environment), as well as the various stakeholders involved in these complex transactions.
Energy and infrastructure finance lawyers have to stay ahead of trends and keep track of many moving variables, including capital liquidity, global commodities prices, interest rates, advances in technology, geopolitical change, and changes in law. The core skills of deal architecture will translate across these spaces.
As the power infrastructure around the globe experiences a generational shift in its energy matrix to gas and renewable power and the commodity-based economies face unprecedented challenges, our clients find themselves needing to be nimbler and more strategic than ever. We are a vital part of our clients’ environmental, social, and governance strategies.
What are some typical tasks that a junior lawyer would perform in this practice area?
Early in your career, you will find yourself taking control of a particular workstream for a transaction. We tailor our assignments around constantly giving associates the opportunities to expand their skill sets. It is not unusual for junior associates to be the day-to-day interface with clients, keeping them apprised of relevant action items or answering questions. Junior associates also play a large role in risk analysis and mitigation of those risks as a component of structuring transactions early on in their career. It’s a skill lawyers will develop throughout their career and providing exposure as early as possible is a priority in the development of our associates. Finally, as a junior associate, you will find yourself taking the initial attempt at drafting the varied types of legal documentation that comprise the framework of a transaction. All of this is done within a supervised environment focused on training but also challenging associates. We all benefit from the firm’s reputation and ability to attract the most complex, world-class, and largest project financings in the world, creating unique learning opportunities for junior associates.