Vinson & Elkins has scooped a role advising on the first sukuk from Swiss renewable energy company EnergyMixx.
The sukuk will be used to fund the expansion of EnergyMixx’s European power plants in the renewable sector.
Finance partner Ayman Khaleq, who led the Vinson team, said the sukuk is unusual in that it is funding a renewables project and is Continental Europe-focused.
“This deal is significant in the market because we’ve not yet seen Islamic finance being used to fund renewable energy projects,” he said. “It’s exciting because we may well see more sukuks funding these kind of projects in the future.” The sukuk, which was listed on the Frankfurt Stock Exchange, presented various legal challenges because the transaction combined Islamic finance with an EU regulatory framework.
Khaleq said: “The challenge is certainly marrying the two. Islamic finance in a European regulatory setting does present challenges in terms of the legal and regulatory structure.”
He added that this deal could encourage the growth of Islamic finance in Continental Europe, which has seen slower growth than in other Western jurisdictions.
“The UK has been quite active because of the support Islamic finance has received from the Government. We’ve not seen the same level of activity in other European countries, but we’re hopeful this will change soon with more deals, such as the EnergyMixx one,” Khaleq explained.
The firm has been instructed to advise on the power plant financing, while lead arrangers have not yet been finalised.