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:

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:

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:

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:

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:

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.

At Chrysses Demetriades & Co LLC, we partner with stakeholders across the renewable energy value chain to provide:

For more information, please contact Chrysses Demetriades or your usual contact at Chrysses Demetriades & Co LLC.