Legal expertise for Kuwait’s power and water PPPs

Kuwait

Khalifah Al Yaqout, managing partner of YFLG, and Ahmad Alshorbagy, partner and head of projects and international dispute resolution, talk to The Energy Year about supporting key energy projects and Kuwait’s growing appeal among international investors. YFLG is a Kuwaiti corporate law firm that serves public- and private-sector clients across various industries.

What do you think are Kuwait’s most attractive aspects for international energy investors?
Khalifah AL YAQOUT: Kuwait’s strong oil and gas sector gives it a robust economic base. While diversification isn’t urgent, it is crucial for long-term sustainability, and Kuwait must activate and support sectors beyond oil to become a regional economic hub.
One of Kuwait’s key advantages is openness. Unlike neighbouring countries that restrict access to foreign firms, Kuwait welcomes international players. KOC, for example, is one of the most successful state entities and works smoothly with foreign firms, avoiding the legal friction common in government projects. This reputation strengthens investor confidence.
Moreover, Kuwait’s long-term commitment to oil and gas creates predictable opportunities for foreign companies. KOC contracts are also flexible compared to standard government agreements, and often include arbitration clauses and other investor-friendly features that make a significant legal difference.
Kuwait has enacted major reforms over the past two years, including laws governing bankruptcies, restructurings and settlements. These measures streamline procedures and involve specialised courts that work to faster timelines.
On top of that, the Kuwait Investment Authority is bringing in firms such as Google, Boeing, Microsoft and SAE International with land and tax incentives. These developments bolster the economy, generate employment and help enrich local expertise.

How does YFLG support international energy clients?
Ahmad ALSHORBAGY: I lead the projects and international dispute resolution practices. Energy-related PPPs – especially power and water projects – are our primary focus.
We also advise on oil and gas transactions in close collaboration with our corporate team. This includes structuring joint ventures, agency agreements and partnerships between foreign investors and local entities. Many of our clients in this space are international players entering the Kuwaiti market through local agents – an approach that remains both common and effective. While we occasionally represent local partners, the majority of our project and corporate work involves foreign entities.
Currently, we are advising KAPP [Kuwait Authority for Partnership Projects] on the four-phase Shagaya Renewable Energy Park. Beyond Shagaya, we have supported numerous oil and gas projects, from joint ventures and agency structures to project financing.
On the disputes front, we are active in arbitration. Many major cases in Kuwait stem from construction conflicts within refinery projects, often related to execution delays between JVs and subcontractors. Disputes arising out of agency and sponsorship agreements are also very common in the oil and gas sector.
Most foreign companies enter Kuwait through joint ventures or agency structures rather than by setting up standalone entities, but legal frameworks are evolving to support that. IPOs are handled by our projects team with input from the corporate and commercial departments. We have advised Senergy Holding and several Korean energy firms. Our firm has strong experience in this domain.

What recent progress have you seen in Kuwait’s PPP landscape?
AA: PPPs are becoming the norm outside the oil and gas sector. Initially, the model stalled, with only two projects launched after the 2014 PPP law. However, the Public Authority for Housing Welfare helped revive the segment by dividing city developments, such as Jaber Al Ahmad City and Sabah Al Ahmad City, into separate investment packages. This led to five successful projects.
Recent PPP projects have proven quite bankable and have attracted domestic and international institutions. Now, with political backing, KAPP is advancing projects such as the second and third phases of the Shagaya Renewable Energy Park. In addition, there are nine more PPPs under way for projects related to energy and commercial real estate, among other sectors. The momentum is real.

How will the new public debt and income tax laws impact project development?
AA: The public debt law will improve the government’s financial flexibility and cashflow position. This will enable more project financing and should bring more sustainable fiscal practices.
Higher taxes on income are inevitable. Kuwait has already introduced a tax on multinationals, and additional regulations have been recently issued. While the Kuwaiti system doesn’t have VAT yet, it will likely be incorporated soon. The national tax system must be globally competitive. Kuwait’s tax infrastructure still needs development, so the implementation of any new measures will be gradual.

What is the outlook for green finance and sustainable projects?
AA: Sustainability is no longer optional. To stay competitive with Saudi Arabia, the UAE and Egypt, Kuwait must embrace green finance. In a positive step, Warba Bank launched a USD 500-million green bond for renewable energy in 2024. Such instruments offer new financing paths for investors and, together with economic stability and a modern tax system, enhance Kuwait’s international appeal.

How does YFLG position itself among domestic and international competitors?
AA: We stand out among domestic firms for our expertise in PPPs and energy law. Our projects team includes former KAPP advisers with experience in feasibility, tendering, contracts and implementation, and our multi-jurisdictional expertise allows us to liaise effectively between domestic and international stakeholders.

KAY: YFLG is a top-tier Kuwaiti law firm with 52 lawyers and six partners. We have significant experience in international dispute resolution and have successfully represented clients in various international arbitration forums, including the ICC [International Chamber of Commerce], HKIAC [Hong Kong International Arbitration Centre], UNCITRAL [United Nations Commission on International Trade Law], LCIA [London Court of International Arbitration] and the ICSID [International Centre for Settlement of Investment Disputes]. Kuwait respects international law and has only had around 10 claims before those bodies, of which we have handled two.
I am proud to be YFLG’s youngest managing partner and the first member of the second generation leading the firm. My father founded YFLG, and today we have a staff of 64 legal professionals. YFLG has built a reputation for delivering high-quality legal services that blend local insight with global reach. Around 40% of our clients are foreign, and YFLG is a preferred choice for international investors in Kuwait.

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