When Redes Energéticas Nacionais is looking for
new business in foreign jurisdictions, it prefers to use lawyers
that are close to the target of the deal, says Marta Almeida
Portugal's Redes Energéticas Nacionais (REN) –
a private electricity transmission and natural gas transportation
and storage company – has embarked on an internationalisation
drive, as part of the second phase of its reprivatisation process.
To this end, the Lisbon-based listed company has already entered
into strategic agreements with China's State Grid and Oman
When deciding whether to use external advice or utilise the
company's in-house legal team to advise on such initiatives,
REN makes its decision based on a number of factors, including the
jurisdiction which the matter relates to and whether or not it
concerns a new line of business, according to head of legal Marta
Almeida Afonso. "When we have issues abroad, it depends on
whether we are chasing a new opportunity, or whether it is a
day-to-day case." She adds that, when it comes to seeking new
opportunities, REN outsources its due diligence work to an external
law firm, relying on the analysis carried out by local lawyers,
while the negotiation of the final purchase agreement and any
subsequent agreements are carried out by both local lawyers and
REN's in-house legal team. "What we have done in the past
is to use local firms, close to the transaction target, which do
not have a presence in Portugal," she says.
Almeida Afonso says that when REN is handling matters in
Portugal the company usually uses its in-house legal team –
given its knowledge of Portuguese law – and seeks advice from
external law firms in relation to specific matters. However, when
dealing with matters in other countries the company chooses
"the best firm in the local market". She adds: "If
that law firm has a presence in Portugal, we can use the contacts
here to make the local lawyers understand how important REN is in
Portugal, although that is not a strict criterion."
REN's current strategy is to develop its business in the
Iberian Peninsula and also enhance its involvement in
interconnections between the peninsula and the rest of Europe and
North Africa. In addition, the company is aiming to increase its
international expansion, particularly in Mozambique and South
America. REN is also active in telecommunications through
Rentelecom, which provides infrastructure, managed services and
Researching the market
What process does REN use when choosing a law firm? According to
Almeida Afonso, when making its selection, REN does not carry out a
tender process, but rather, takes the approach of researching which
are the best law firms in the relevant area and requesting
proposals from three of them, before choosing the most appropriate.
However, she declines to name any of the law firms the company has
used, and says that the projects concerned are not public.
With regard to contentious matters, the type of litigation REN
is most likely to be involved in are land access disputes,
according to Almeida Afonso. She adds that such disputes are common
in Portugal, and REN is sometimes approached by Portuguese and
Spanish law firms as potential service providers in relation to
these types of cases.
The company's in-house legal team comprises ten staff and
focuses on regulatory and concession issues – it sometimes
seeks to use external law firms for public tenders, large
litigation cases and labour issues. In such instances, local firms
or international firms with a presence in Portugal are preferred,
given their expertise regarding the local market, Almeida Afonso
Currently, the company is eyeing South America – where REN
sees the biggest potential opportunities – as the next region
to target in its international expansion, Almeida Afonso says. It
is public knowledge that REN is seeking transmission opportunities
and last September, the company met for talks with Chile's
energy minister Máximo Pacheco to discuss possible
participation in the market, though Almeida Afonso declined to
comment. Chile recently approved a transmission law that will open
up its grid to more private investment – this will, in turn,
provide impetus to energy generation projects that have stalled due
to transmission congestion. Meanwhile, REN is also seeking greater
involvement in renewables having been granted a concession by the
Portuguese government for its wave energy arm to operate a pilot
wave power project.
Marta Almeida Afonso is head of legal at Redes
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