Special Focus: Latin America
Game changer
Investment is increasing in
Latin America, particularly in
the energy and infrastructure
sectors – but this presents new
challenges for law firms, which
face increased competition,
decreasing fees and an
escalating war for the best
legal talent
of Brazil’s infrastructure programmes
but there have been other significant
initiatives. These include a natural
gas agreement between Rosneft
and Petroleo Brasileiro, a $2
billion credit agreement between
Brazil and Angola for energy
and infrastructure development
and possible investment in airports by
Chinese companies.
Celso Costa, managing partner at
Brazilian leader Machado Meyer Sendacz
e Opice Advogados, says that demand
from the infrastructure and energy sectors
The FIFA World Cup 2014 in Brazil
is spurring on corporate work, including
showcased the strength of Latin
M&A. “The corporate governance practice
American football. Germany may have
is also active, responding to the steady
won the competition but Latin American increase of global conglomerates – finance,
teams put in impressive performances,
infrastructure, tax and labour are also
with seven of the 16 teams making the
highlighted by the urgency of investments
knockout stages coming from the region, and by government stimulus.”
compared to six from Europe, two from
Alexandre Bertoldi, from Pinheiro Neto
Africa and, finally, the USA.
Advogados in Brazil, highlights project
Latin American economies, like their
finance as an area of interest because,
football teams, are starting to challenge
although the Brazilian economy is not
the dominance of the old-world order.
growing as fast as it was in the past few
Flourishing markets, an abundance of
years, there is a considerable amount of
natural resources and a burgeoning middle money to be invested in improving the
class are keeping both businesses and their country’s infrastructure, including roads,
legal advisors busy.
ports, airports, power generation and
However, despite promising economic distribution. “The government shows signs
opportunities, law firms also have to
that they will slow down direct financing
tackle a number of problems. Latin
via the Brazilian Development Bank
American firms are facing increasing
(BNDES) – therefore project finance might
competition from global players looking
be the only alternative for these big projects
to expand their operations in the region – on the pipeline,” he adds.
this increased competition means fees are
There is similar activity across the
decreasing. Meanwhile, the competition
region. Other recent matters include
for the best talent is intensifying with
Latin America’s largest solar photovoltaic
some lawyers now finding the prospect
power plan, developed by SunEdison,
of working in the public sector or for a
constructed in Chile and inaugurated this
company an attractive proposition. In
year, a $2bn oil pact between Venezuela’s
addition, more organisations are looking
PDVSA and Rosneft, the possible sale of
to increase the amount of legal work
Total´s holding in Argentine pipeline firm
they do in-house in order to reduce
Transportadora del Gas del Norte, and
expenditure on external advisers.
Ecuador securing a $2bn financing for
Jaime Carey, managing partner of Carey future oil production from Chinese outfit
y Cía in Chile, says that Latin America
Sinopec. In Colombia, meanwhile, Gas
is experiencing a generalised growth
Natural Fenosa, Duke Energy, GFD Suez
in investment, especially in the energy,
and Huadian were linked to the planned
mining and infrastructure sectors: “This
sale of a 57.6 per cent holding in state-run
opens a wide range of opportunities for law electricity company Isagen.
firms, which can advise companies wanting
to invest in the region.”
Cultural changes
The World Cup and Rio de Janeiro’s
The uptake of international interest
Olympics in 2016 are headline examples
underscores the socio-economic changes
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July / August 2014 • IBERIAN LAWYER • 41