Successful negotiation of a long-term land lease agreement for a client for the construction of a wind farm

The case concerned a client from the renewable energy sector, planning a large-scale wind investment – the project involved the construction of a farm consisting of a dozen wind turbines. A key prerequisite for the success of the entire project was securing title to the land on terms that would allow profitable and stable operation of the installation throughout its planned life.

Complexity of negotiations

Negotiating a lease agreement for a wind project differs significantly from standard real estate transactions. The multi-year horizon of the contract-with the possibility of its renewal-requires precise regulation of a wide catalog of issues, the omission or understatement of which may generate serious disputes between the parties in the future. Among the most significant of these are: mechanisms for indexing the lease rent, the scope of easements necessary for the construction and operation of associated infrastructure, rules for access to the land for servicing the turbines, as well as detailed conditions for restoring the property to its original condition after operation. An additional challenge was the multi-entity ownership structure of the land included in the project, requiring parallel negotiations with several owners with different expectations and levels of familiarity with the specifics of wind investments.

Law firm’s activities

The HWW team conducted a detailed analysis of the legal status of the properties included in the project, identifying risks that could jeopardize the project at the stage of construction or operation of the farm. On this basis, the law firm developed an optimal contractual structure and negotiation strategy, taking into account both the interests of the client and the legitimate expectations of the landowners. In the course of negotiations, the HWW team ensured that clauses were introduced into the contract to secure the continuity of access to the land, precise rent valorization mechanisms limiting currency and inflation risks, as well as provisions regulating the client’s situation in the event of changes in the ownership structure of the property.

Result

The concluded lease agreements provide the client with a stable and uninterrupted title to the land for the entire period of the wind farm’s development and operation, eliminating key legal risks that could jeopardize the project’s financing or timely implementation. The financial terms of the lease obtained remain favorable relative to market standards, which directly improves the economics of the entire project. Efficient negotiations with a number of landowners allowed the client to meet the investment schedule and proceed to the next stages of the investment process without delay.

Aleksandra Lindner – Partner, Attorney at Law, Court Mediator; Agata Bączkowska – Attorney at Law were responsible for handling the case on the Law Firm’s side.