Chrysses Demetriades & Co Law Office

We are pleased to share that our firm has recently joined the Cyprus International Business Association (CIBA), an organization that plays a significant role in representing and supporting the interests of international businesses operating in Cyprus. Through this membership, we aim to contribute to CIBA’s ongoing efforts to promote a stable and business-friendly environment, while also remaining closely engaged with developments that affect the broader international business landscape. This step reflects our continued commitment to maintaining strong ties within the professional community and to supporting initiatives that encourage sustainable growth and collaboration.

On 29 May 2025, the House of Representatives passed the Investment Funds Administrators Law, L.101(I)/2025, marking a pivotal advancement in Cyprus’s financial regulatory regime. Published in the Official Gazette on 18 June 2025, the Law introduces a standalone legal framework for the regulation and supervision of fund administrators—a sector previously operating under the broader umbrella of fund manager legislation. This legislative development establishes a distinct regime tailored to the operations of fund administration companies, bringing Cyprus into closer alignment with leading EU and global jurisdictions. For the first time, investment fund administrators are subject to direct licensing and supervision by the Cyprus Securities and Exchange Commission (CySEC), ensuring a higher level of regulatory consistency and oversight. Under the Law, fund administrators are required to maintain minimum capital reserves—€50,000, or €125,000 where additional services are provided—carry professional indemnity insurance, and operate from a registered and central office located in Cyprus. Governance standards are enhanced through obligations relating to board structure, internal controls, and risk management. In addition, the Law imposes robust compliance, reporting, and anti-money laundering obligations, reflecting a clear commitment to operational integrity and investor protection. The scope of permitted activities includes core administrative services such as maintaining investor registers, calculating net asset values, and processing investor transactions for both UCITS and Alternative Investment Funds. While these functions were previously referenced under existing legislation and EU directives, they are now unified within a coherent and purpose-built legal structure. Investor confidence is further safeguarded through provisions addressing conflicts of interest, mandatory disclosure requirements, and reinforced governance mechanisms. CySEC is granted broad enforcement powers to ensure adherence, including the imposition of sanctions where necessary. The enactment of this Law significantly enhances the regulatory clarity and professionalism of Cyprus’s fund services sector. By setting a defined operational and supervisory framework, the Law strengthens the jurisdiction’s credibility and appeal to international asset managers seeking a stable and transparent European base. It represents a strategic step forward in Cyprus’s ongoing effort to modernise its financial services landscape and support sustainable growth in the investment funds industry. For more information, please contact Demosthenes Mavrellis ([email protected]) or your usual contact at Chrysses Demetriades & Co LLC. Author:  Demosthenes Mavrellis, Partner

The global energy transition is well underway, and renewable energy is at the heart of this shift. As the world moves towards decarbonisation, the financing landscape for Renewable Energy Sources (RES) projects and acquisitions is becoming increasingly sophisticated. With many government subsidies gradually being phased out, investors and lenders must now navigate complex financial structures to bring clean energy projects to life. Understanding the legal and financial frameworks that underpin renewable energy investments is critical to ensuring project success and long-term profitability. At Chrysses Demetriades & Co LLC, we specialise in renewable energy law, offering comprehensive legal support to clients investing in and financing solar, wind, and other clean energy projects. Our expertise includes project finance, mergers and acquisitions (M&A), regulatory compliance, and due diligence—helping clients mitigate risks and unlock opportunities in this dynamic and rapidly evolving sector. RES Project financing: A shifting landscape Financing RES projects typically involves a mix of equity and debt financing, sourced from: Government and transnational institutions (e.g., EU funding for green infrastructure projects). Traditional financial institutions (banks and investment funds). Alternative sources (private equity and institutional investors focused on sustainable investments). Historically, the RES sector benefitted from subsidies and feed-in tariffs that spurred early development. While such incentives have largely tapered off for new projects, legacy agreements—such as those with the Renewable Energy Sources and Energy Conservation Fund—continue to provide long-term revenue stability for earlier investments. Today, the viability and bankability of renewable projects hinge less on the sponsor’s financial strength and more on project-specific fundamentals, including: Predictable cash flows, Long-term Power Purchase Agreements (PPAs), Regulatory clarity, and Secure permitting and land tenure. Still, sponsors may be asked to provide additional security (e.g., corporate guarantees or asset pledges) to strengthen the creditworthiness of the financing package. Key considerations for Lenders and Investors in RES projects When structuring RES project financing, lenders seek strong security over assets and income streams. Common measures include: Mortgages on land used for solar or wind installations (freehold or long-term lease). Assignment of receivables from PPAs with licensed suppliers or the Electricity Authority of Cyprus (EAC). Insurance coverage tailored to RES related risks (e.g., weather variability, equipment failure). Fixed and floating charges over project assets and revenues. Share pledges over the project company to facilitate enforcement in case of default. While cross-border financing agreements may be governed by international standards (often English law), local security documents remain subject to Cyprus law, requiring precise legal structuring to ensure enforceability. How we help: Our firm advises on structuring renewable energy financing, aligning with both lender expectations and local legal requirements, while safeguarding our clients’ strategic and commercial objectives. RES M&A: The importance of Due Diligence As investor appetite grows for operational and development-stage renewable assets, thorough due diligence remains essential to assessing risks, validating investment assumptions, and ensuring regulatory compliance. Key workstreams in RES M&A Due Diligence: Legal: Project company structure, licensing status, and contractual rights. Technical: Performance metrics, grid connection viability, and technology risk. Financial: Revenue projections, cost assumptions, and debt servicing ability. Business: Market dynamics and offtake competitiveness. Real Estate: Land use rights, lease terms, zoning, and environmental constraints. Critical legal considerations in RES transactions 🔹 Ownership & corporate structure Ensuring the correct legal ownership of shares and project assets is vital—especially when renewables projects are structured via special purpose vehicles (SPVs). 🔹 Licensing & regulatory compliance Renewable energy projects require multiple licenses (generation, environmental, construction, etc.). Any gaps or non-compliance can delay commissioning or trigger penalties. 🔹 Land tenure & Real Estate rights Solar and wind installations often span large land areas. Legal review must confirm secure, long-term rights to use land—without encumbrances that could threaten project financing. 🔹 Power Purchase Agreements (PPAs) PPAs are foundational to revenue certainty in renewables. Given that Cyprus currently operates a transitional electricity market, PPAs remain essential for selling energy under bilateral terms. Where PPAs are not yet in place, acquirers must either condition their investment on agreement execution or ensure bankable alternatives exist. Material contracts & Change of Control restrictions Investors and buyers must review: Engineering, Procurement & Construction (EPC) and Operations & Maintenance (O&M) agreements. Service contracts that may carry ongoing obligations. Change of control provisions requiring consent from third parties before the project can be transferred or acquired. How we help: We support clients through the entire acquisition process—conducting detailed due diligence, negotiating transaction documents, and structuring deals to minimise risk and maximise return. Looking ahead: Opportunities in the RES market The renewable energy sector presents compelling opportunities for investors and lenders aligned with sustainability goals. Success, however, requires a deep understanding of the legal and financial ecosystem in which these projects operate. Whether you’re financing a new solar park, acquiring a wind farm, or negotiating a long-term PPA, expert legal guidance can be the difference between a good project and a great one. Authored by Chrysses Demetriades, Partner. At Chrysses Demetriades & Co LLC, we partner with stakeholders across the renewable energy value chain to provide: Tailored legal advice for renewable energy project financing and M&A, Expertise in structuring project finance and bankable security packages, Comprehensive due diligence and regulatory compliance support, and Strategic contract negotiation and risk mitigation for PPAs and energy trading arrangements. For more information, please contact Chrysses Demetriades or your usual contact at Chrysses Demetriades & Co LLC.