Effective Structuring of Renewable Projects in the Kingdom of Saudi Arabia

10 May 2017

Muhammad Arif SaeedPartner, Saudi Arabia

WEBINAR

− Global Law Firm (61 offices across 29 countries);

− 3500 Strong (700 Partners & about 2,300 lawyers);

− 7 offices in the Middle East ( Abu Dhabi, Dubai, Amman, Doha, Baghdad, Erbil & Riyadh (Jeddah soon));

− Riyadh office (17 lawyers – over 50% Saudi + Shariah Expertise );

− Renewable Practice Group:

Our clean energy and sustainability group has advised on over 40GW ofrenewable energy projects globally. We have been advising on renewablestransactions for over 20 years. We have been ranked number 1 for M&Atransactions in the renewable energy sector globally for 2016 by CleanEnergy Pipeline. Accordingly, we fully understand current market trendsand can often help our clients deliver extra value through our knowledge ofmarket participants and deal structure and pricing. Our team focuses andadvises across the full project lifecycle from securing the developmentassets and through to construction and financing and exit. This meansthat we are able to providing strong commercial advice including how eachelement impacts on the other and how best to then protect our client’sposition.

About Eversheds Sutherland( www.eversheds-sutherland.com )

1. Introduction

2. Saudi Regulatory and Corporate Regime

3. Timeline

Presentation overview

Introduction

Foreign Investment Options in Renewable Sector

─ Project Development - Develop and own Project Assets

─ Services – EPC, O&M, Project Management Asset Management Services

─ Manufacturing – Supply Chain

─ Construction (Local)

5

Saudi Regulatory & Corporate Regime

─ General Law

─ NREP & REPDO

─ Foreign Investment Law

─ Companies Law

─ Saudization & Nitaqat

─ Timeline

EXITSaudi Regulatory & Corporate Regime

General Law

─ Shariah

─ Government Tenders & Procurement Law

─ Governing Law & Jurisdiction

─ Arbitration Law & Enforcement Courts

Saudi Regulatory & Corporate Regime

NREP & REPDO

─ Land Rights - Solar Parks

─ Pre-Bid Stage

─ RFQ & RFP

─ Legal Presence

─ Licensing Regime

Saudi Regulatory & Corporate Regime

Foreign Investment Law

─ National Treatment, repatriation & expropriation

─ Market Access Restrictions

─ SAGIA Foreign Investment License

• Types of FIL

• 100% Foreign Ownership

• Eligibility to apply

─ Special License for RE Project Development

─ TCR

Saudi Regulatory & Corporate Regime

Market Access Options

─ Direct sale of goods and services to end customers in Saudi Arabia

─ Distribution or Commercial Agency

─ Foreign Direct Investment

─ The Foreign Investment Law

─ Saudi Arabian General Investment Authority (“SAGIA”)

─ The Negative List

EXITMarket Access

Options

Table

11

License Type Authority Activities/Services Need for local

Partner

Minimum Capital

Requirement(SAR)

Timeframe

Engineering ServicesDesign &

Consultation

Asset Management

Services

O&MServices

Engineering Supervision/Owner’s

Engineer Services

EPC EPC-M

Professional Partnership

MoCI CoE

Yes No No Yes Engineering and

procurement consultation

only

Engineering and

procurement consultation

only

Yes25% (min)Qualified

Saudi Engineer

200,000 45 working days

Project management, implementation of designs, procurement of equipment and execution of projects

SAGIACoE

No Yes(to the extent of

the projects under

management)

No No Yes(other than

construction activities)

Yes(other than

construction activities)

Yes25% (min)

200,000 2 to 3 months

from filing

Operation & maintenance of energy projects and related support services

SAGIA No No Yes No No No No 500,000 for branch

200,000 for LLC

2 to 3 months

from filing

Industrial License

SAGIA No Not as services No No Not as services

Not as services

No 1,000,000 2 to 3 months

from filingTemporary Commercial Registration (TCR)

MOCIOrSAGIA

- - - - - - No 30 days

EXITTypes of FIL

Companies Law

─ Type of Vehicle

─ Minimum Capital Requirements

─ Lock-in Period in case of a CJSC

─ Management & control

─ Dividends

─ Statutory Reserve

Saudi Regulatory & Corporate Regime

Saudization & Nitaqat

Saudi Regulatory & Corporate Regime

Timeline

Saudi Regulatory & Corporate Regime

Pre-Bid

Teaming Agreement

or MoU

− Applications for setting up legal presence

− SAGIALicense

Issuance of SAGIALicense

− Issuance of the CR

− Appointment of the GM

− Issuance of the CoC

− MoCi’sApproval of the AoA

− Notarization of the AoA

− Capital Deposit

Registration with the below government departments:

− Municipality

− MoL− Passport

Dept.− GOSI− GAZAT

Bid Approval

15-30 Days 25 Days 60 Days

10 Days

Questions?

15

aldhabaan.eversheds.comThis information pack is intended as a guide only. Whilst the information it contains is believed to be correct, it is not a substitute for appropriate legal advice. Mohammed AlDhabaan in Association with Eversheds Sutherland (International) LLP can take no responsibility for actions taken based on the information contained in this pack.

Muhammad Arif SaeedPartner, Saudi Arabia

Contact:Tel: +966 11 484 4448Fax: +966 281 6611Mob: +966502411166Email: arif@aldhabaan.eversheds.com

Address:Office 11, Home Office ComplexUrubah Road cross Prince Turki RoadPO Box 245555, Riyadh 11312Kingdom of Saudi Arabia