Seven schemes have been awarded citations on the basis of the timely construction of the scheme, cost control, economic importance of the asset and the challenging location of the construction site. Each scheme has scored well in one or more of the categories described above.
Mundra UMPP – India
The Mundra Ultra Mega Power Project is a 4,150MW coal-based thermal power plant developed by Coastal Gujarat Power Ltd located in Mundra in the state of Gujarat, India. The project’s sponsor is Tata Power, one of India’s largest private power companies. Mundra UMPP, the first among the nine UMPPs planned by Indian government, had a project outturn cost of Rs174.47bn (US$3.2bn), only slightly higher than the initial estimated cost of Rs170.24bn. The boiler package was awarded to Doosan, whereas the turbine was sourced from Toshiba Japan. Commercial operation date was targeted for March 30 2013 but the actual completion was slightly earlier on March 22 of the same year.
The project raised a total debt of US$3.2bn in 2008. This was divided into rupee loans and US dollar loans. The original rupee loan amounted to Rs58.5bn, which was equivalent to US$1.46bn. The rupee lenders were SBI (US$500m), IIFCL (US$450m), HudCo (US$125m), Oriental Bank of Commerce (US$125m), Vijaya Bank (US$125m), and associate banks of SBI.
It also raised a US$1.775bn in US dollars provided by the Korea Export Import Bank (US$500m), International Finance Corp (US$450m), Asian Development Bank (US$250m), and BNP Paribas (US$327m) with cover from Korean Export Insurance Corp. Legal advisers were Chadbourne and Parke for the lenders and J Sagar Associates for the sponsor. The company is currently refinancing the facility to tap the 5/25 flexible scheme.
Paiton 3 – Indonesia
Paiton 3 is an 815MW coal-fired power plant built on the Java Island of Indonesia. It is referred to as an expansion to the 1,280MW capacity of Paiton Energy, whose sponsors are GDF Suez and International Power (now called Engie, 40.5%), Mitsui & Co (40.5%), Tokyo Electric Power (Tepco, 14%) and Batu Hitam Perkasa (5%). It started commercial operations in March 2012, with Mitsubishi Heavy Industries of Japan as the main equipment supplier.
The scheme has received praise from local bankers regarding its timely construction profile. In a remote location on Java Island, the scheme is the first super-critical coal unit in Indonesia and the largest generating unit on the Java Bali grid.
The total project cost was US$1.519bn and a US$1.215bn 18-year loan was raised in 2008 on an 80:20 DER basis. The lenders are BTMU (financial adviser), Mizuho Corporate Bank, SMBC and Sumitomo Trust, as well as BNP Paribas, Credit Agricole CIB, ING and HSBC. JBIC provided a direct loan equivalent to 60% of the total debt. Lenders have Latham & Watkins as their legal adviser.
Manjung Island Energy – Malaysia
Manjung Island Energy is a special purpose vehicle set up to raise financing for the 1,010MW coal-fired power plant that was developed by TNB Janamanjung (TNBJ), a wholly-owned subsidiary of Tenaga Nasional Berhad.
It is the first ultra-supercritical plant in South-East Asia. The Malaysian government awarded TNB the contract to build a new 1,000MW coal-fired power plant in August 2010, and the EPC contract was awarded in early 2011, after which site works began immediately. It successfully commenced commercial operation in April this year. It was delayed, but by just 12 days.
TNBJ awarded the US$1.2bn turnkey engineering, procurement and construction contract to a consortium comprising Alstom Power Systems, Alstom (Wuhan) Engineering & Technology, Alstom Services, China Machinery Import and Export Corporation and CMC Machipex.
In November 2011, the company issued a M$5bn Islamic securities programme that was lead-arranged by CIMB Investment Bank and Bank of Islam. HSBC was the financial adviser. The issue is the first AAA rated project financing bond in Malaysia and the first ringgit sukuk issuance from Tenaga’s group of companies since 2001.
Uch II – Pakistan
Uch II is a US$480m 375MW gas-fired IPP, the first such plant under the new power policy of Pakistan. It is operated by Uch II Power, the SPV set up by sponsor France-based GDF Suez. It is an extension of the 572MW Uch I project, which is 75% owned by the then International Power (now GDF Suez), but Uch II was developed on a standalone basis.
The EPC contractors were Descon Engineering of the UAE (supported by the IDB) and Hyundai Engineering Company of South Korea (supported by Kexim). The plant comprises two GE9E gas turbines and one steam turbine. It achieved a successful commencement of commercial operation in April 2014 and is helping to relieve acute power shortages in the country.
The sponsor raised a US$390m debt funding in 2011 based on a 75:25 debt to equity ratio. The loan, with a 14-year tenor, was mainly funded by developments banks – the Asian Development Bank, the International Finance Corp, Korea Export Import Bank and the Islamic Development Bank. The financial adviser was Standard Chartered Bank and international legal counsels are Shearman & Sterling for the lenders and Latham & Watkins for the borrower.
Burgos Wind – Philippines
Burgos Wind is a wind farm located in Burgos, Ilocos Norte in the northern part of Luzon Island in the Philippines. The wind farm, developed by Energy Development Corp (EDC) of the Lopez group, was commissioned in November 9 2014 and upon its completion became the largest wind farm in the country and in South-East Asia, covering 600 hectares and three barangays of Burgos, namely Saoit, Poblacion and Nagsurot. Its wind farm contractor is Vestas Wind Systems. It is also the first to enjoy the country’s new feed-in tariff regime.
The estimated cost for the construction of the wind farm was US$450m and a US$315m debt financing was signed with a group of foreign and local banks in October last year. The loan was divided into three tranches, including one with Eksport Kredit Fonden (EKN), Denmark’s export credit agency; an EKN covered tranche; and a local peso commercial bank tranche.
The foreign banks are ANZ, DZ Bank, ING Bank, Malayan Banking (Maybank) and Norddeutsche LB. The local tranche was arranged by PNB Capital and SB Capital Investment Corp, and they were joined by BDO Unibank, Land Bank of the Philippines, Philippine National Bank, and Security Bank Corp as lenders. The legal counsels were Herbert Smith Freehills and Puno & Puno for the sponsors, and Clifford Chance and Picazo Law for the lenders, while Eksport Kredit Fonden had Kromann Reumert.
Tuaspring – Singapore
The S$890m Tuaspring desalination and power plant project was awarded to Hyflux in 2011. It involves the construction of a 70mgd desalination plant, that will supply water to Singapore’s national water agency Public Utilities Board under a 25-year (2013–2038) water purchase agreement, and a 411MW power plant that will supply power to the desal plant and to the national grid.
Hyflux’s wholly-owned subsidiary Hydrochem is the EPC contractor, utilising gas and steam turbines manufactured by Siemens. Hydrochem has obtained a US$138.7m export credit agency loan from KfW IPEX-Bank with Hermes cover. NAES Corp, a unit of Itochu Corp, was appointed as the O&M contractor for the power plant. The desalination plant was commissioned on time in 2013 and the power plant commenced operation this year.
The company secured a US$14.4m buyer’s credit loan in 2012 from the Japan Bank for International Cooperation to finance the reverse osmosis membrane elements and high pressure pumps from Japanese suppliers for the desalination project. It also raised a S$720m 18-year term loan facility from Maybank Singapore and Maybank Kim Eng Securities which had fully underwritten the facility in 2013. Ashurst and Drew & Napier were legal advisers for lenders and borrower respectively.
Pacific Light – Singapore
Pacific Light Power is an 800MW gas-fired power plant in Singapore that has seen a number of ownership changes in the last 10 years or so. Its current sponsor, FPM Power Holdings, a joint venture between First Pacific of Hong Kong and Manila Electric Co, acquired a 70% stake in the project in 2013 from India’s GMR Infrastructure, while Petroliam Nasional of Malaysia was sold the other 30% in 2011. The project is still sometimes referred to as Island Power, the name used by original owner Intergen when it received its licence in 1997.
The project was commissioned in 2013, after the Singapore LNG has started operation of its terminal. Last year the project received the Green Mark Award from the Building Construction Authority of Singapore and was registered as a clean development mechanism (CDM) project under the UN framework convention on climate change.
The total project cost was S$1.2bn (about US$860m now) and a 10-year US$700m refinancing facility was completed this year with lenders BTMU, Malaysia Exim Bank, Maybank, Sumitomo Mitsui Trust Bank and Standard Chartered Bank. Standby letters of credit for US$230m and S$32m were provided by Maybank and StanChart while S$65m of working capital was provided by Maybank. This package took over a 17-year S$670m facility that was raised in 2011 by GMR Infra, the owner then. Norton Rose and local firm Lee & Lee were the legal advisers to the lenders while the sponsors had White & Case and Rajah and Tann. EPC contractors are Siemens and Samsung C&T Corp.