Linklaters advised a group of banks lending to fund two projects:
These projects are the first steps towards building the UK’s carbon capture and storage (CCS) capability.
CCS, or carbon capture and storage, is a process that traps CO₂ emissions from industrial or power generation sources, transports them via pipelines or ships, and stores them deep underground so they can’t escape — making the power generated much cleaner.
Think of NZT Power and NEP as a two-part system.
NZT Power is a new natural gas power station in Yorkshire. It will burn gas to generate electricity. It will be constructed with in-built carbon capture equipment, so most CO₂ emissions will be trapped before they reach the air.
NEP is the corresponding transport and storage network. It will move the captured CO₂ from NZT Power (and, in future, other CO₂-generating projects in the area) through a pipeline under the North Sea and store it in rock formations about 1,000 metres below the seabed.
The two are separate projects, but make financial sense together: NZT Power produces the CO₂ (and the energy), and NEP transports and stores it underground.
The ownership of the projects is shared between some of the world’s biggest energy companies:
NZT Power is owned in majority by BP, which holds a 75% stake. Norway’s Equinor owns the remaining 25%.
NEP is owned by BP and Equinor, each holding 45%. The French energy company TotalEnergies owns the final 10%.
Both NZT Power and NEP are being funded through project finance — a way of paying for large infrastructure projects.
Think of it like this. Imagine you’re starting a business. But instead of dipping into your own savings or putting your personal assets on the line, you borrow money that’s secured against the business itself. Once the business starts making money, you use the business’s profits to pay the loan back.
That’s essentially how project finance works — the loan is secured against the project’s future income and assets, not the owner’s other assets.
Here, the money for these projects is being borrowed from a group of banks (including NatWest, Spain’s BBVA, and France’s Société Générale).
And these loans are only secured against the projects’ assets — like the power station and pipeline — and their future income. This allows BP, Equinor, and TotalEnergies to raise billions without needing to risk providing security which may impact their other businesses.
Linklaters acted for the group of banks lending the money to fund the projects.
The lenders’ goal was simple: get repaid in full, with interest, on time.
Linklaters’ job was to make that as likely as possible — and to build in contractual protections in case anything goes wrong down the line.
So, here’s what the lawyers actually did to achieve this.
Deciding who takes the risk: In established industries like offshore wind, it’s already clear who is responsible if something goes wrong. For example, if a turbine blade fails, the manufacturer (not the project owner) has to pay to replace it. This means the lenders aren’t exposed, because the project can still generate revenue and repay its debt.
Since CCS is new, it doesn’t yet have established rules for who takes which risks. So Linklaters had to negotiate these from scratch, including:
And they wrote these into the contracts by:
Protecting against changes in government policy: The projects only work financially if government subsidies — payments that support low-carbon technology — stay in place.
Linklaters made sure the loan contracts included “change in law” clauses. These clauses say that if the law changes — for example, if subsidies are cut — and the projects make less money as a result, the deal terms consider such changes so the lenders aren’t left out of pocket.
The importance of ‘the legals’: Without things like clear allocation of risks or government commitments, the 20+ lenders would not have signed off on the project finance.
That’s how Linklaters helped turn an ambitious CCS plan into a financeable reality that banks were willing to support.
Despite this being a complex financing deal, trainees and junior lawyers at Linklaters ran key parts of the process that kept the deal moving.
Drafting and negotiating documents: Trainees were responsible for certain processes, including conditions precedent (the approvals and paperwork needed before the banks release funds) and corporate authorisations (board and shareholder approvals for the deal).
They produced the first drafts, updated them after negotiations, and made sure the documents matched the rest of the deal. They also reviewed comments from the other sides’ lawyers, decided how to respond, and sometimes explained their choices directly on calls.
Handling lender feedback: Junior team members processed detailed comments from the banks, making sure changes were tracked, logged, and fed into the right documents without creating inconsistencies.
Managing conditions precedent: Trainees led the conditions precedent checklist — the approvals, documents, and contracts lenders required before releasing funds.
This meant collecting permits, licences, and regulatory approvals, chasing missing items, and flagging delays that could hold up funding.
Running the signing process: Before closing the deal, trainees tracked all the necessary signatures from the parties, checking every document was the final agreed version.
Because NZT Power and NEP were the first UK CCS projects, the contracts, risk allocation, and government support framework created here will pave the way for the future of low-carbon infrastructure.
Over time, we’re likely to see CCS deals become more standardised. Instead of negotiating risk-sharing from scratch, future projects may reuse the clauses developed here.
We’ll also see more joint ownership structures, with major companies teaming up to share the heavy costs and risks that come with untested technologies.
But one of the biggest uncertainties that remains is policy risk.
A change in UK climate policy could massively impact a project’s finances, making a deal less attractive for lenders. That’s why protections like “change in law” clauses will continue to be crucial in future CCS financings.
For an aspiring lawyer, Linklaters offers the chance to be at the heart of groundbreaking deals — shaping the rules for new industries, solving problems no one’s solved before, and seeing your work make a real-world impact on climate change
