Americas Report 2007
Americas Report 2007
Coal still king in US fuel mix: Coal remains a vital and growing part of the US fuel mix, according to the latest government energy report. Coal's share of the power market will remain at 57% in 2030, while electricity demand will have jumped 41% between 2005 and 2030.
Future of coal in hands of legislators
The outlook for traditional coal is uncertain following the collapse of what would have been the most ambitious new-build programme ever and its financing. Legislation that mandates carbon capture is likely, and this risk must be carefully considered in future deals. By Alison Healey.
The Fed's role in controlling emissions
Coming fast on the heels of Al Gore’s Oscar, a shockingly warm early January and new leadership in Congress has brought the issue of global climate change to the fore of public attention for 2007. By James C Liles, regulatory adviser, Milbank Tweed Hadley & McCloy LLP.
NorTex structured for mass appeal
The need for US$335m in financing for a North Texas gas storage operation resulted in a hybrid financial structure from WestLB and Barclays to attract commercial banks, hedge funds, insurance companies and other institutional investors. By Alan Gersten.
Bobcat seals dome deal
The Bobcat Gas Storage transaction represents one of the initial financings done for the construction and long-term financing of a natural gas salt cavern storage facility in the US. By Yen Hua, RBS Securities Corporation.
Europeans coming back to America
European banks, advisers and law firms have made US infrastructure a priority after the recent PPP surge. Despite a quiet start, the domestic American players are now taking notice, so are the roads really paved with gold? By Antony Collins
Two ports compared in syndication
This year’s ports deals have brought new financial structuring and a whole new understanding of acceptable leverage to Americas project finance. A third deal is in the works. By Alison Healey.
Brazil bargains on power auctions
A massive new hydropower scheme will help deliver a huuge portion of Braizl's future energy needs. The experience of the power markets recently has been mixed but there are ambitious plans. But in the short-term the outlook is less certain. By Barry Marshall.
Asia Pacific Report 2007
Thailand launches new power plan
Thailand has finally announced decisions for newly required additional power capacity up to 2017, and it has made clear what state-owned power company Egat can have. Minerva Lau writes.
Resurgence of IPPs in Indonesia
Interest in the Indonesian power sector is brisk. Over the past 12 months, new independent power producer (IPP) project development activities have increased and that is a positive leading indicator for the future. By Conor McCoole, head of project finance, Asia for Standard Chartered Bank.
Vietnam attracts IPP interest
The successful financings of the Phu My 2.2 and Phu My 3 independent power projects in 2002-03 were widely seen as catalysts that would open the electricity sector in Vietnam to foreign investment. By Vikas Batra, executive director and head of project & structured Finance, Asia, and Ian Mathews, director, project & structured finance, ANZ.
Quantifying the impact of political risks
In power projects, political risks can affect the tariff and dispatch. By Tillmann Sachs, PhD candidate, Nanyang Technological University, Singapore; Alberto Dalla Rosa, senior adviser, project and structured finance, J-Power, Japan; and Robert LK Tiong, associate professor, Nanyang Technological University, Singapore.
Brunei taps first methanol project
Brunei has successfully raised funding for its first methanol project. The debt is also the sultanate’s first major limited recourse facility. By Tomonori Miyagawa, structured finance division, Bank of Tokyo-Mitsubishi UFJ.
Sino's PF gold rush
Project finance in the mining industry is a common feature in many parts of the Asia-Pacific region but it is a fairly new development in China. Sydney-based Sino Gold (SG) has not only financed its Jinfeng gold project but is the first foreign-owned company to own and develop an ore body in China. By John Arbouw.
Mumbai modernisers reach milestone
India’s modernisation of its major airports, starting with Mumbai and New Delhi, is progressing well with the successful financial closing of Mumbai International Airport’s US$1.15bn debt funding. Ashish K Singh, assistant vice-president, and Bhavna Chugh, manager, at UTI Bank, discuss the project.
Asia Pacific Report 2007
Gencos waiting for gas code: Assuming the success of the Mirant Philippines portfolio sale serves as an indicator, Temasek may soon relaunch the sale of its tripartite gencos, PowerSeraya, Senoko Power and Tuas Power.
Global Infrastructure Report 2007
Global Infrastructure Report 2007
The rise of infrastructure funds: In the past 18 months there has been more than US$160bn globally earmarked for infrastructure investments.
The changing face of PPPs
Until recently, PPPs have largely been the preserve of transport, with health, education and justice sectors following. However, a groundswell of new projects in the leisure and property arena has marked a fresh new vein of design, build, finance and maintain (DBFM) deals. By Antony Collins.
Gautrain Second largest PPP
Earlier this year, financial close was reached on South Africa's US$3.3bn Gautrain rapid rail link public-private partnership (PPP) in Gauteng province. By Bobby Stewart, a partner in the finance and infrastructure and transport groups at Freshfields Bruckhaus Deringer in London.
Italian hospitals receive a boost
The Legnano Hospital PFI, which reached financial close in March 2007, has emerged as one of the most important PPPs from the current wave of key infrastructure projects in Italy. Luca Pecchio, head of infrastructure at Techint Compagnia Tecnica Internazionale, and Gabriele Pescarini, head of infrastructure at Dexia Crediop in Rome, explain this pioneering and challenging project.
Quick march to Forth close
A project with much innovation, delivered to a tight timeframe – Kevin Brown, associate director, infrastructure finance at Bank of Scotland, discusses the first bank-financed large PFI hospital for some time.
Picking out the waste deal
The waste sector is the only really bright light in the UK private finance initiative (PFI) sector. Driven by the need to meet EU directives on reducing landfill, the sector is now a decent if slow-moving source of deals. The Lancashire project is the largest thus far. By Rod Morrison.
French PPPs in-step with INSEP
On December 21 2006, the first PPP contract under the Ordinance of June 17 2004 (known as the Contrat de Partenariat) was signed by the Ministry for Youth and Sports on behalf of the French Government, in order to refurbish the National Institute for Sport and Physical Education (INSEP). Stephane July and Pierre Bonnet from Dexia’s PPP team in Paris discuss the deal.
Spencer Dock leads the way
The Spencer Dock Convention Centre has set a new standard in social infrastructure PPPs in Ireland. John Kirwan, from the infrastructure finance unit at DEPFA Bank, explains the project.
PA and NJ's differing ideas
Governors orchestrating two of the most eagerly awaited road privatisations in the US have chosen two widely divergent courses of action. A look at the key points of the extensive analyses shows that the deals should attract different types of investors. By Alison Healey.
First Mex PPP jumps hurdles
The Irapuato-La Piedad Ps730m (US$67m) toll road became the first PPP closed transaction in Mexico after hurdles that included a disputed presidential election, drug gangs as well as a long and costly bureaucratic process that presages difficulties for future PPPs. By Alan Gersten.
PPP hospitals in Mexico
Mexico has seen in the PPP scheme an alternative for the development of public service and infrastructure projects that would otherwise require the spending of large amounts of money in times of budgetary constraints. By Martha A Villalobos-Murillo, an associate and member of the real estate and infrastructure practice group at Baker & McKenzie in Juarez.
Gyeongju gets cleaned up
South Korea has introduced the PPI scheme for social services and infrastructure relatively only recently, and one of those successfully funded is the Gyeongju City sewage system project. By Kong Seil, general manager, project finance dept, Korea Development Bank and Bae Jung Min, assistant manager.
Tiger cub needs bigger ports
The WTO has changed Vietnam. Its entry to the organisation is a landmark event as it now has to continue to open its markets to the world, including port development works. Writes Minerva Lau.
India Report 2007
India Report 2007
India is undergoing a rapid and wide-ranging process of transformation. It is the current business destination, as it embarks on an ambitious mission of infrastructure improvement and development. As prime minister Manmohan Singh had said: "If you are a global company and India is not part of your plan, then you have missed the bus."
Growing demand for power
Once, India’s mammoth power sector was a mess; a tangled web of financially weak state electricity boards (SEBs) that fiercely guarded their individual fiefdoms while bleeding themselves into the ground. Today, power generation is the order of the day, and projects, both large and small, are in the works. Savita Iyer writes.
Merchant power plants in vogue
The Indian economy is one of the fastest growing in the world, with the average growth rate for the past four years of over 8% per annum. The government’s planning commission has also targeted annual growth of about 9% over the next five years. By Supratim Sarkar, senior VP and group head, and Rajat Misra, vice-president, project advisory and structure finance, SBI Capital Markets.
HOEC raises maiden PF loan
Hindustan Oil Exploration Company (HOEC) is engaged in petroleum exploration, development and production. It recently raised funds for a petroleum field development project, the first to be financed on a project recourse basis in India. Bhavyang Oza, assistant vice-president at UTI Bank, writes.
Cairn re-energises reserve-based borrowing
When Cairn Energy, and its plethora of mandated lead arrangers (MLAs) signed-off the US$1bn of loans for the Rajasthan oil field development in May 2006, it marked one of the largest international bank financings in India and the largest reserve-based lending facility in more than a decade. By Antony Collins.
PFI in trade infrastructure
The growth in Indian trade led by continual economic buoyancy has unleashed a whole new set of opportunities for private financing in infrastructure. This article attempts to showcase a flavour of such opportunities. By Sanjay K Sinha, director, Saurabh Suneja, team leader (PPP), and Akshay Gupta, manager (PPP), CRISIL Infrastructure Advisory.
Financing crowded highways
India has some 3.3m km of roads in an extensive network but road development has not grown in tandem with rapidly increasing traffic growth. Cherian Thomas of IDFC discusses.
Airport privatisation soars
In 2005–06, Indian airports handled more than 75m passengers, growth of about 24% over the previous year compared with global passenger traffic growth of about 6% in 2006, writes Mohit Batra, senior general manager and head of global project finance at ICICI Bank.
Port sector - Too attractive to ignore
From lukewarm private interest in early 1990s to aggressive pursuit post-2000, India’s port sector has witnessed quantum change, writes Arvind Mahajan, executive director and head of energy, infrastructure and government, Manish Sharma and Arun Unni, managers, infrastructure advisory, KPMG.
Top corporate profiles
India is booming with activities in all sectors. There are many major corporate companies which are contributing to the development of the much needed infrastructure in the country. Minerva Lau picks out the main players.
India Inc goes hunting
Indian firms are snapping up assets around the globe. They are now a serious part of the M&A scence, buoyed by a booming home economy. Barry Marshall investigates
Middle East Report 2007
Middle East Report 2007
M&A drivers in place: With huge sums generated by the oil price rise and more competition in some sectors, Middle Eastern companies are increasingly considering mergers and acquisitions. At the same time, regionally based funds are flexing their financial muscles overseas and targeting major companies.
Sabic crests the wave
In what is the biggest deal so far in the Gulf capital markets this year, Saudi Basic Industries (Sabic) bought out American giant GE’s plastics division. By Barry Marshall.
Kingdom dominates Saudi IPOs
The IPO of Prince Alwaleed's investment firm Kingdom Holding Company was the biggest IPO in the Gulf this year. By Barry Marshall.
Promise could be fulfilled
To-date, the Middle East has been a backwater for securitisation with only a handful of deals. But that is set to change with a clutch of transactions in the market and more on the way. Paul Farrow reports.
Securitising the Sharia way
With Dubai’s announcement that it would open up the real estate market to non-citizens in 2002, Shaikh Mohammed Bin Rashid al Maktoum made history. By Sandeep Chaudhry, CEO, Syed Kashif Hussain and Ramin Takin, ENSEC.
Reviewing Islamic financiers
After more than three decades of modern Islamic finance, the time has come to review the past and examine the future of this fast-growing industry. By Emmanuel Volland, Standard & Poor’s.
Views of an Islamic scholar
Interview with Dr Mohammad Nejatullah Siddiqi, Islamic scholar, former President of the International Association of Islamic Economics. By Barry Marshall.
Issues in Islamic liquidity
From Jakarta to Jeddah, there are about 300 Islamic banks and other financial institutions now operating in some 40 countries, with the value of Islamic banking internationally estimated at approaching US$500bn. By Warren Edwardes, CEO of Delphi Risk Management.
Drivers of the euro sukuk
The sukuk market and Islamic finance as a whole are experiencing considerable growth. This article looks at the opportunities around the development of a euro sukuk market. By John Weguelin, managing director, European Islamic Investment Bank PLC (EIIB).
Loan market holds firm
The Middle East has been the loan market story of the year. So far only marginally affected by fall-out from the wider loan market liquidity squeeze, both the corporate and the financial institution market still enjoy ample liquidity. By David Cox.
Nakheel – Building ambitions
With US$30bn of projects in the pipeline, Nakheel visited the capital markets in 2006–07 to raise more than US$5bn from a stock-settled sukuk and an Islamic loan. By Helen Bartholomew.
KPPC sets the pace
The US$1.4bn financing for Kuwait Paraxylene Production Company (KPPC) successfully closed on July 5 2007. By Olivier Musset, managing director, energy project finance, Societe Generale; Cem Orekli, vice-president, energy project finance, Société Générale and; Salah Al Kharji, financial co-ordinator, Petrochemical Industries Company KSC.
Suez's Arabian nights
The financing and syndication success of the gigantic Marafiq IWPP project broke new grounds despite its sheer magnitude. By Rajit Nanda, CFO, Raphael Barreau, vice president and Elio Wolff, financial advisor, Suez Energy Middle East, Asia and Africa.
Mes shows strong appetite
Mesaieed B is a significant milestone in the development of the Qatari power industry and is an indication of the strong appetite that international sponsors and funding institutions alike currently have for Middle East power deals. By Barry Marshall.
Continuing to grow
Project Finance International’s third survey of the Middle East projects market shows the dollar volume of projects continues to increase – although the actual number of projects has remained remarkable similar over the three surveys. By Rod Morrison.
Suez's Arabian nights
The financing and syndication success of the gigantic Marafiq IWPP project broke new grounds despite its sheer magnitude. By Rajit Nanda, CFO, Raphael Barreau, vice president and Elio Wolff, financial advisor, Suez Energy Middle East, Asia and Africa.
Australia Report 2007
Australia Report 2007
Oz miner digs into Laos: July saw first drawdown under the facilities agreement for the financing by an ANZ-led syndicate for the Phu Kham Copper-Gold and Phu Bia gold projects in the Lao PDR.
Oz miners into Africa
Buoyed by supercharged commodity prices, slowly emerging political stability and ample investor appetite, Australian mining firms are increasingly pursuing projects in Africa. Financiers are quick to follow. By Greg Roumeliotis.
Rollingstock - A PPP case study
In November 2006, the Reliance Rail consortium was awarded Australia’s largest ever social infrastructure Public Private Partnership (PPP) mandate. By Michael Polich, director, structured finance, ABN AMRO Australia and Richard Smith, Babcock & Brown.
South Australian in court
When the South Australian government launched its strategic plan in 2004, the critical issue was the adequacy of the state’s infrastructure on many levels. By Ray Wilson, director, Plenary Group.
Living space for PPP
Social infrastructure projects have continued to dominate the PPP landscape in Australia in 2006, with a number of projects reaching financial close and several new projects being tested as business cases. By Bill Banks, head of project finance advisory, Ernst & Young.
The Transfield transformation
From a small construction company started by two expatriate Italians in 1956 to a publicly listed and globally diversified conglomerate, the Transfield story is not only a work in progress but also a tale of the evolution of public-private partnerships in Australia. By John Arbouw and Rod Morrison.
The Big Mac's extra relish
Macquarie has gone from being an Australia-focused bank to a major international infrastructure force within a few short years. It has not all been plain sailing and smooth seas in exporting the brand though. By Antony Collins.
European Report 2007
European Report 2007
Rays of expensive hope: Renewable energy is now one of Europe’s busiest project financing sectors. Wind may have been a driving force in recent years but solar is now coming under the spotlight.
Winds of opportunity
A gust of lucrative wind projects is blowing financiers in Europe eastwards, towards Greece, Turkey and Bulgaria and Romania. By Greg Roumeliotis.
Gust of honour
Wind power may have been presented as a saviour against carbon emissions, but will the renewable source be able to reach its full potential in key second-tier markets such as Italy? By Antony Collins.
Tirme for a change
Jose Maria Arana, head of project finance RBS Iberia, and Gabriel Saro, director, loan markets, RBS, explain the innovative and pioneering Tirme project financing.
Nickel and dimes
Talvivaaran Mining Company Ltd (Talvivaara) is an exploration and development company focused on the development and commercial exploitation of two polymetallic deposits, Kuusilampi and Kolmisoppi, in Sotkamo, Eastern Finland through 80% owned project company Talvivaara Project Ltd.
Route 1 – In the fast lane
The Tel Aviv Fast Lane project will be based on an innovative and unique dynamic toll system, designed to manage vehicle traffic demand on an ongoing basis. By Daniel Zinger, founding partner, TASC Strategic Consulting.
Path to Maliakos Kleidi
The €1.1bn Maliakos to Kleidi PPP is one of Greece’s top motorway schemes and represents one of the largest road deals to be successfully financed this year in Europe. Jeremy Brittenden, partner, and Christopher Healy, senior associate, from Lovells discuss the project.
Turkish port deals ahoy
The US$755m privatisation of Mersin Port is only one of the deals coming up as result of the country’s privatisation plan. By Greg Roumeliotis.
The final chapter, hopefully
The late Sir Alastair Morton always said Eurotunnel would become a profitable cash cow. Well yes, but perhaps albeit a little later than he envisaged. The company's debt has now been restructured in one of the biggest infra deals of the year. By Rod Morrison.
Model council BSF signed in
Sheffield BSF reached financial close on July 31 2007, the 10th BSF scheme to close since this government initiative was launched. By Laughlan Waterston and Theodore Rohou, Infrastructure and PPP, SMBC, with input from Andrew Percival, Taylor Woodrow, Geoff Quaife, HSBC, and Laurence Jones, Sheffield City Council.
The infra market in CEE
Central and Eastern Europe (CEE) mainly comprises countries that were governed by the COMECON regime until around 1990. It includes Austria, the Czech Republic, Slovakia, Hungary, Poland, Romania, Bulgaria and several Balkan States (Slovenia, Croatia, Serbia). By Stefan Eder, partner and EMEA Head of Finance & Projects Group at DLA Piper.
Global Energy Report 2007
Global Energy Report 2007
Nuclear - A risky business: Countries across Central and Eastern Europe (CEE) are implementing multi-billion euro projects to construct the next generation of nuclear power plants (NPPs). However, will the as yet unused non-recourse model ever appear in the sector?
CCS looking financeable
Environmentalists, politicians, and now developers are making it clear that carbon capture and storage (CCS) will be a big part of future coal project planning and will also be applied to existing projects to some degree. With the enormous costs of this technology, there may be a role for project finance. By Alison Healey.
La Magascona - The largest PV
Santander and Fotowatio Energía Solar SL have recently closed the financing of La Magascona, the largest photovoltaic project. By Adrian Katzew, global energy head, Alvaro Jimeno and Daniel Machuca, Santander Structured Finance.
A mighty Asian wind
Gaining the advantages of a utility-owned wind energy business is the strategy behind Roaring 40s. The Roaring 40s joint venture partner Hydro Tasmania is the trading name of the Hydro-Electric Corporation, a Tasmanian-based Government Business Enterprise. By John Arbouw.
PF with a carbon kicker
Carbon trading is expected to grow in importance as the world seeks realistic solutions for curbing carbon emissions. It is surprising then the practice has yet to make a significant impact on project finance – where financing energy is the staple diet of business. By Rod Morrison.
Ensus gets the ball rolling
The Ensus bioethanol project financing is the first in its sector in the UK. It is a sector that could bring forward half a dozen deals in the next 12–24 months. The sector is fashionable, ie clean energy, but is still at its frontier stage. By Rod Morrison.
Citizens cane
Brazil’s biggest bank and the nation's state bank have multi-billion dollar plans to develop sugar/ethanol plants. Many of these plants will be small operations, but they could hold the key to opening a replacement source of energy for many nations. By Alan Gersten.
A tale of two IPP cities
The Sultanate of Oman has an outstanding track record in developing IWPP and IPP projects and a long history of successful operation of such projects. By Rajit Nanda, SVP and CFO, Suez Energy Middle East Asia & Africa, Cedric Girod, senior financial adviser, Suez Energy Middle East and Pascal Martese, financial adviser, Suez Energy Middle East.
The next Middle East
Southern Africa is one of the world's busiest places for new power projects. Massive economic growth needs a new generation of power plants to cope with increasing energy demands. Barry Marshall investigates schemes from parastatals such as Eskom and a host of IPPs in the region.
Singapore stores
Singapore, the city state located strategically at the tip of the Malayan peninsula, is becoming a major regional hub for oil and gas storage facilities. Universal Terminal is the latest to join the bandwagon. Minerva Lau writes.
VCs in a new energy world
Private equity funds have been racing to invest in renewable energy projects, which offer high returns and new opportunities for exposure in a sector that is seeing some big LBO-style infrastructure financings. Barry Marshallinvestigates.
Organic carbon offsets
In 2004, UK retailer J Sainsbury introduced a new service. If customers typed a code number from an organic potato package into the company's web page, they would instantly identify which farm had produced the potatoes. By Dr Marianne Osterkorn, international director, Renewable Energy & Energy Efficiency Partnership (REEEP).
