- What is Asset Deal?
- An asset deal is a transaction structure in which specific project assets — such as permits, land rights, grid connection agreements, and equipment — are acquired individually, rather than purchasing the shares of the project company (SPV). The buyer does not assume the SPV's existing liabilities unless explicitly agreed. Asset deals are common for early-stage projects where no SPV has been established yet, or where the buyer wants to selectively acquire certain rights. In German renewable energy transactions, asset deals require careful structuring to ensure the seamless transfer of all permits and contractual relationships. — BGB §433; Industry standard
- What is Binding Offer (BO)?
- A binding offer is the final, legally enforceable bid submitted by a prospective buyer after completing due diligence. It contains the definitive purchase price, a marked-up Share Purchase Agreement (SPA) or Asset Purchase Agreement (APA), any remaining conditions precedent, and the proposed timeline to closing. Unlike a non-binding offer, the binding offer creates legal obligations and typically includes provisions for break fees or escrow arrangements. In structured renewable energy sale processes, the binding offer stage follows full technical, legal, and financial due diligence and represents the last step before signing. (BO) — Industry standard
- What is Due Diligence (DD)?
- Due diligence (DD) is the comprehensive investigation conducted by a prospective buyer before acquiring a renewable energy project or portfolio. It typically encompasses technical DD (technology, design, yield estimates, construction risks), legal DD (permits, contracts, land rights, corporate structure), financial DD (model assumptions, cash flows, tax), environmental DD (EIA compliance, species protection), and insurance DD. The scope and depth of due diligence increases with project size and complexity. In renewable energy transactions, DD findings directly influence pricing, representations and warranties, and the allocation of risk in the purchase agreement. (DD) — Industry standard
- What is Information Memorandum (IM)?
- An Information Memorandum (IM) is a comprehensive project description document, typically 20–50+ pages, prepared by the seller or their advisor and shared under NDA with qualified prospective buyers. The IM provides detailed information on the project's technical specifications, permitting status, grid connection, land agreements, yield assessments, financial projections, and risk factors. It serves as the primary basis on which buyers formulate their non-binding offers. A well-structured IM accelerates the transaction process by reducing information asymmetry and enabling buyers to assess the opportunity efficiently before committing to full due diligence. (IM) — Industry standard
- What is Letter of Intent (LOI)?
- A Letter of Intent (LOI) is a non-binding document issued by a prospective buyer to a seller, outlining the key proposed terms of a project acquisition. The LOI typically contains the indicative purchase price or price range, the proposed transaction structure (share deal or asset deal), a timeline to signing, exclusivity provisions, and key conditions. While generally non-binding on commercial terms, exclusivity and confidentiality provisions are usually binding. In renewable energy transactions, the LOI marks the transition from initial interest to serious engagement and typically triggers the start of detailed due diligence and data room access. (LOI) — Industry standard
- What is Non-Binding Offer (NBO)?
- A Non-Binding Offer (NBO) is a preliminary bid submitted by a prospective buyer based on their review of the Information Memorandum, before conducting full due diligence. The NBO typically contains an indicative price range, key valuation assumptions, the proposed transaction structure, financing approach, conditions for proceeding, and a timeline. While not legally binding on price, the NBO serves as the basis for seller selection — shortlisted bidders are invited to proceed to due diligence and submit a binding offer. In structured renewable energy sale processes, the NBO stage is a critical filter that determines which buyers advance in the process. (NBO) — Industry standard
- What is Representations & Warranties?
- Representations and Warranties (R&Ws) are contractual statements of fact made by the seller in a Share Purchase Agreement (SPA) or Asset Purchase Agreement (APA) regarding the condition and status of the project being sold. They typically cover areas such as the validity of permits, completeness of land agreements, absence of undisclosed liabilities, tax compliance, environmental compliance, and accuracy of financial information. A breach of R&Ws triggers the seller's indemnification obligation, subject to agreed liability caps, baskets (de minimis thresholds), and survival periods. R&Ws are a central element of risk allocation in renewable energy transactions and are often a focal point of SPA negotiations. (R&Ws) — Industry standard
- What is Share Deal?
- A share deal is a transaction structure in which the buyer acquires the shares of the Special Purpose Vehicle (SPV) — typically a German GmbH — that holds the project. By acquiring the SPV, the buyer obtains all project assets, contracts, permits, liabilities, and obligations in a single step. Share deals are the standard transaction structure for operational and ready-to-build renewable energy projects in Germany, as they ensure the seamless continuation of all contractual relationships (grid connection, PPA, land leases, O&M contracts). The buyer assumes all existing SPV liabilities, making thorough due diligence essential to identify any hidden risks or obligations. — GmbHG §15; Industry standard
- What is Share Purchase Agreement (SPA)?
- A Share Purchase Agreement (SPA) is the definitive, legally binding contract governing the sale and purchase of SPV shares in a renewable energy project transaction. The SPA specifies the purchase price and payment mechanism (locked-box or completion accounts), representations and warranties, indemnification obligations and liability caps, conditions precedent to closing, covenants for the interim period between signing and closing, and the closing mechanics. The SPA is the most critical legal document in any share deal and typically undergoes extensive negotiation between buyer and seller. Quality of the SPA terms — particularly R&W scope, indemnity caps, and CP structure — directly affects transaction certainty and risk allocation. (SPA) — GmbHG §15; Industry standard
- What is Special Purpose Vehicle (SPV)?
- A Special Purpose Vehicle (SPV) is a legally independent entity — in Germany typically structured as a GmbH — created to hold a single renewable energy project. The SPV ring-fences the project's assets, liabilities, contracts, and cash flows from the developer's other activities, enabling clean project-level financing and facilitating eventual sale. Each project is held in its own SPV, which means a transaction can be executed as a straightforward share transfer. SPVs are the standard structuring mechanism in German renewable energy development and investment, as they provide legal clarity for lenders, simplify due diligence, and enable efficient portfolio management across multiple projects. (SPV) — GmbHG; Industry standard
- What is Technical Due Diligence?
- Technical Due Diligence (TDD) is a comprehensive assessment of a renewable energy project's technical merits, typically conducted by an independent technical advisor (Independent Engineer) on behalf of a prospective buyer or lender. TDD covers technology selection and equipment specifications, site conditions, system design and layout, yield assessment review, construction plan and risks, EPC contract evaluation, O&M arrangements, and expected degradation and performance over the asset lifetime. TDD findings directly influence transaction pricing through yield adjustments, CAPEX/OPEX corrections, and risk identification. A robust TDD report is a prerequisite for project finance and institutional investment in renewable energy assets. (TDD) — Industry standard
- What is Virtual Data Room (VDR)?
- A Virtual Data Room (VDR) is a secure, cloud-based platform used to host and share confidential project documents during the due diligence phase of a transaction. The VDR provides granular access controls (different document access for different bidders), activity tracking (which documents were viewed and when), Q&A functionality, and audit trails. Standard VDR content for a renewable energy transaction includes permits, land agreements, grid connection contracts, yield studies, environmental assessments, financial models, EPC contracts, and corporate documents. A well-organized VDR accelerates the due diligence process and reduces transaction timelines, directly supporting faster time-to-signing. (VDR) — Industry standard
