Project Finance NewsWire

December 2002

IN THIS ISSUE

Enron rulings may affect other companies
US securities regulators have started investigations, with fast-track hearings, into the validity of Enron’s exemptions from rules governing public utility holding companies

Anticipating A Possible Bankruptcy
Creditors renegotiating debt terms should keep a watchful eye on the potential bankruptcy implications of the proposed restructuring, lest the troubled borrower eventually wind up in bankruptcy...

Texas wind projects
A program enacted just last year in Texas to encourage the generation of electricity from renewable energy has helped fuel a boom in the installation of wind projects in that state...

UK wind projects
Interest is increasing across the world in renewable sources of energy, especially wind. The commitment is perhaps greatest in Europe...

Wind projects In Brazil
Precise measurements of wind speed carried out in Brazil in the early 1990s revealed the existence of a large potential for windpower generation, currently estimated at 143,000 megawatts...

Corporate tax shelter disclosure
The US government identified six broad categories of transactions in October that it wants corporations to report to the Internal Revenue Service as potential tax shelters...

Pakistan update
The World Bank is encouraging Pakistan to let the market set the price for electricity. The country faces difficult policy issues in moving to such a system...

Banker confidentiality obligations
A developer asked recently whether materials submitted to a bank in connection with a proposed lending transaction would be subject to confidential treatment by the lender...

Environmental update
The Republican victory in the mid-term elections in November should help the Bush administration advance two of its high-profile environmental initiatives — the “clear skies initiative” to reduce ...


IN OTHER NEWS

A depreciation bonus
A depreciation bonus will be harder to claim on power plants if changes that key members of Congress proposed in November are enacted...

Power plant repairs
Power plant repairs will be the focus of a meeting at the Internal Revenue Service on December 3...

Pakistan
Pakistan is expected to offer tax incentives, including an exemption from income taxes, for new power projects that use indigenous fuels...

Mauritius
Mauritius won a round in the Indian courts. Most inbound investment into India is run through offshore holding companies in Mauritius or Holland...

Transmission credits
Transmission credits puzzle the IRS. Owners of independent power plants in the US sign interconnection agreements with utilities allowing their plants to connect to the grid...

California
California reduced the tax grossup rate that utilities are authorized to collect on “contributions in aid of construction.” The reduction is temporary...

Successor Liability for Sales Taxes
Sales tax liability follows the assets in California unless the buyer receives a certificate from the State Board of Equalization that the seller has paid all sales or use taxes due, a state

Alabama
Alabama lost again in its effort to collect property taxes on merchant power plants at the higher rates for utility property...

Certain acquisitions
Certain "acquisitions of control of a corporation” and any “substantial change in capital structure” will have to be reported to the IRS in the future...

Disqualified interest
“Disqualified interest” will not lose its taint, even if the borrower later removes the condition that led to its disqualification

Minor memo
A Tax Notes Magazine study: “The effective rate of tax on profits generated by foreign affiliates of US corporations was more than halved between 1983 and 1999."