Collateral Conversion in Cross-Border Infrastructure Financing Projects

Abstract

Due to its geographical position, and also because of the potential integration of the Western Balkans economies into the European single market in the near future, in recent years, important and legally challenging cross-border infrastructure projects have taken and will continue to take place in Albania. These complex projects, such as the construction of railways, gas and oil pipelines and others, are challenging to finance, not to mention the legal challenges they face including the occupation of construction sites and easement. Above all, providing collateral is a crucial factor in increasing the chances of successfully financing, implementing, and completing these projects; particularly where in such projects the assets themselves used as collateral are purchased, created, and built during the implementation phase. In this article I will address some Albanian legal issues to be considered in the process of legal assessment of the quality and provision of collateral in financing of cross-border infrastructure projects. Specifically, I will address some specific legal issues associated with the conversion of collateral. The need for this analysis arises from the challenges involved in implementing such projects in Albania and also from the need to recognize the compatibility of the legal provisions and their applicability in different jurisdictions. Especially when the same pool of lenders are available for the companies building and developing the relevant infrastructure networks in multiple cross-border states. Below, I have itemized the key issues to consider when seeking to secure such financing.