Legal advisory related to development of solar parks and photovoltaic power plants

Design and development of solar parks in Hungary

The National Energy and Climate Plan of Hungary designates an essential role for increasing capacity of solar energy and installed photovoltaic (PV) capacity in the field of renewable energy. Mandatory Off-take Regime (“KÁT”) and the Renewable Energy Subsidy System (“METÁR”) guaranteeing a feed-in tariff and latest Premium type subsidies aim to promote the extension of energy production based on renewable energy. The renewable energy sector, as an investment area offers great opportunities for both strategic and financial investors, either domestic or foreigner.

However, due to the complex regulatory background and requirements of financial institutions funding such projects, any organization wishing to enter the sector or other market players planning transactions in the sector, should give particular attention for the suitability and possible risks of a renewable energy project.

As of 13 January 2024, the foreign direct investment („FDI”) regime has been amended in a way that the Hungarian State will have a first ranking pre-emption right with respect to acquisition (sale and purchase) of target companies involved in activities related to solar power plants. Such pre-emption right might be exercised within a peremptory term of 60 business days, by Hungarian National Asset Management Inc., based on the proposal of the Minister responsible for energy policy. Such pre-emption right shall not be applicable in case of solar power plants qualifying small-scale household power plants.

How can we assist you in implementing your solar power investment plans?

• Our colleagues have extensive and sector-specific expertise in supporting the preparation, development and acquisition of solar and renewable energy projects.
• With respect to the risks of individual projects and changing regulatory environment, it is recommended to involve our colleagues with comprehensive approach and creative attitude, already at the stage of project planning, 
• Our lawyers are cooperating with tax advisors of RSM Hungary therefore can provide comprehensive advisory on tax and legal structuring of renewable energy projects and on development thereof.

We are providing full range of legal advisory services related to due diligence and acquisition of PV projects having licenses already, and related to establishment of new PV projects and to participation on tenders as well. In addition to the development of contractual system, our advisory services also include the implementation of complex tasks related to ensuring the acquisition of the necessary real estates.

Our legal services related to solar power plants and renewable energy projects

• Legal advisory with respect to Hungarian regulatory background in general;
• Review of legal status of real estates, legal advisory on establishing the real estate structure necessary for the solar park development;
• Drafting and negotiation of long-term real estate lease, also sale and purchase agreements, representation before landowners during conclusion of such contracts;
• Preparation of land use and mortgage contracts and conduct of negotiations;
• Legal advisory during plot formation procedures;
• Legal support of building permit procedures and procedures for establishment of cable rights;
• Legal support of proceedings related to use of agricultural land; 
• Execution of a full-scale due diligence process in connection with the PV project and companies holding the licenses, including especially general corporate law, real estate law, tax and financial due diligence, investigation of METÁR resolutions, environmental permits, grid connection agreements, building permits and cabling rights;
• Preparing projects for sale, carry out a seller-side due diligence in advance, making proposals to reduce risks, or to address any insufficiencies arising in connection with the operation;
• Legal assistance and drafting transactional documents on acquisition of solar power plant projects affected by Renewable Energy Subsidy System or mandatory off-take or by Brown / Green Premium tender;
• Legal advisory, representation and compilation of necessary documentation related to participation on Green Premium tenders;
• Legal assistance with respect to capacity aggregation rules, re-localization / plot formation of projects, successions;
• Structuring contractual system, drafting and negotiating agreements on solar park design and EPC works;
• Drafting and negotiating project management service agreements;
• Drafting and negotiating operation and maintenance (O&M) agreements and scheduling agreements;
• Participation in implementing optimal company structure, conducting necessary company registration and amendment procedures;
• Legal support during development of financing schemes and related securities, necessary to the acquisition or construction of photovoltaic projects;
• Development of Joint Venture structures, investment cooperation structures, and development of  contractual relationships of the subsidized company;
• Drafting cooperation agreements aiming the involvement of a professional partner;
• Representation during legal disputes, litigation connected to photovoltaic projects.