Throughout the financing markets, new regulation is having a profound impact – from Basel III to Dodd Frank and the amendments to the EU Capital Requirements Directive, from Solvency II for insurance companies to the Alternative Investment Fund Managers Directive for hedge funds and other private equity funds, the regulatory net is being cast widely and not always in wholly consistent ways. By Tim Conduit, partner at Allen & Overy.
ECAs represent a silver lining in the project finance market right now with plenty of liquidity for projects. By Charles Whitney and Emma Walshe, Norton Rose.
Milbank Tweed Hadley & McCloy LLP, which recently celebrated the 35th anniversary of its presence in Asia with the anniversaries of the firm’s Tokyo and Hong Kong offices, offers some views on the Tokyo and Seoul-based projects markets. By Alexander Borisoff, Young Joon Kim and Jeff Rector, Milbank Tweed Hadley & McCloy LLP.
Drawing on their experience of more than a decade financing offshore assets, Ian Cogswell, head of natural resources, and Antoine Saint Olive, head of offshore infrastructure, both in the Global Infrastructure & Projects group at Natixis, discuss why the FPSO sector is proving so resilient in today’s challenging project finance market.
One of Brazil’s biggest challenges is its poor infrastructure, which has historically inhibited international competitiveness. What began as an increased commitment to address this national weakness under Brazilian President Lula’s PAC growth acceleration programme, took on a more aggressive and pragmatic approach when President Dilma Roussef took office. By Glaucia Calp, senior director and Latin American infrastructure leader, and Igor Maresti, associate director, infrastructure, Fitch Ratings.
The slowdown in the global economy has overwhelmed developed and emerging economies alike. India’s GDP growth rate has slowed down, partly due to global factors, but more because of slow reforms and delays in implementation of projects in the country. By Abhaya Krishna Agarwal, partner and leader PPP, Adil Zaid, associate director and Ikshit Jain, senior associate, Government and Transaction Advisory Services, Ernst & Young India.
Malaysia has a deep and liquid domestic capital market to meet the project finance requirements of its ongoing infrastructure boom. In addition to strong domestic interest in such projects, the size of the market has resulted in a growing level of interest in Malaysian infrastructure projects by international developers and financiers. By Michael Cooper, Marat Zapparov and Mark Ee, HSBC.
For the Thai power sector, 2012’s headline story was the approval of the third revision of the Power Development Plan 2010–2030 (PDP3). By Mark Plenderleith and Will Heath, Freshfields Bruckhaus Deringer, and Albert T Chandler and Jessada Sawatdipong, Chandler & Thong-ek Law Offices.
A major trend in Philippine project finance transactions is the leadership role that local banks have taken in arranging and financing big ticket infrastructure projects. This is a major turnaround from as recently as five years ago, where financing was primarily provided by global banks and multilateral institutions. By Arsenio Kenneth M Ona, vice-president, Investment Banking Group, First Metro Investment Corporation.
The Top Ten deals in terms of dollar amount for the Americas in 2012 were predominantly in the oil and gas sector. The US$3.6bn Sabine Pass Liquefaction financing dwarfed all the others, at more than double the size of its closest competitor, Cutbank Dawson Resources, a shale gas financing for reserves in British Columbia led by MUFG.
The Ocotillo Express wind project is now up and running, concluding a saga that included intense opposition. The deal was the first large project financing in the US to include a tranche from the North American Development Bank. By Alison Healey.
In September 2012 QIC Global Infrastructure, on behalf of its managed clients (QIC GI), successfully reached financial close on the long-term (50-year) concession from the Ohio State University (OSU) representing the first long-term lease of a University Parking System in the United States. By Rhys Evenden, principal, Matthew Hall, principal and Patrick Mulholland, associate, QIC Global Infrastructure.
For years, developers, bankers and lawyers have talked about using bonds for Latin American financing. Now, they’re actually doing it. Exhibit A – SBM Offshore’s US$500m FPSO deal, using private-placement bonds. By Alan Gersten.
From October through to March, the wind blows 24 hours a day, seven days a week at 30–50 knots on the Isthmus of Tehuantepec. This wind power convinced five commercial banks, two national banks, one ECA and the IDB to build the US$1bn Marena Renovables, which would be the largest wind farm in Latin America. By Alan Gersten.
Mexico’s government is engaged in a comprehensive plan to expand the nation’s electrical grid and generating capacity. By Octavio Berron Cámara, chief financial officer, Fermaca Global, and Christopher Cross, partner, and Paola Agrati, associate, Latham & Watkins.
The year 2012 will be remembered as the year Australia took its biggest step to becoming the next Qatar and the world’s largest LNG producer, with two LNG projects successfully raising almost US$30bn in project finance.
It is clear that if transactions such as the Sydney Desalination Plant are anything to go by, superannuation funds, overseas pension funds and sovereign wealth funds will have a prominent role to play in the Australian project finance market in 2013. By Michael Ryan, senior associate, Allens.
India has an ambitious road and highway development plan, and the plan includes the construction of mega-roads that are more than 500km long. GMR has won the first and only mega-road that has been put on tender so far. By Minerva Lau.
The Gulf U-Thai transaction marks the first Thai IPP in which international banks are lending long-term in both US dollars and Thai baht. By Sonali Tang and Carol Ho from Bank of Tokyo-Mitsubishi UFJ Ltd.
On September 28 2012, SP PowerAssets Ltd (SPPA), in its capacity as trustee-manager of the SP Cross Island Tunnel Trust, entered into a S$1.59bn non-recourse project finance facility with six banks. By Lim Wee Seng and Ting Fu Long, DBS Bank.
Experience tells us that for innovative, large and first-to-market transactions, the government of the day seeks to establish a strong precedent for future deals. The Wiri Men’s Prison PPP, New Zealand’s first major PPP, is a prime example of this. By James Darcy, partner, Allens.
If you followed the EMEA PF market in 2012 you would have heard a lot about the scarcity of long-term bank debt, and probably been told that the biggest demand was for short-term, high-margin debt. The top of the table is no surprise then, but you would be forgiven for not believing that a UK PFI deal with a nearly 30-year tenor was the second biggest deal of the year.
European grantors have been reluctant to provide inflation-linked availability fees, but a recent Dutch deal has used just that to cater to pension fund demand. Can this model be extended for larger deals, however? By Robert Smith.
Kuwait Energy’s US$165m RBL facility underwritten by Deutsche Bank and the IFC is an important milestone in the company’s continued growth and track record since its inception in 2005. By Dolan Hinch, director, head of infrastructure and energy, Middle East & Africa, Deutsche Bank.
The financial close of the Tamar gas project long-term financing, achieved against a backdrop of the many challenges of today’s economic climate, marked yet another landmark in Israel’s burgeoning gas industry. By Ben Shorten, partner at Shearman & Sterling’s London office and Natasha Kirby, associate at Shearman & Sterling’s London office.
Recently, huge natural gas resources have been discovered in the Rovuma Basin in offshore Mozambique off the east coast of Africa and financing activity on them has already begun. By Rajesh Agarwal and Narayan Subramanyam, SBI Capital.
This case study describes the challenges that arose and solutions developed during the project structuring on the expansion of the Azito power plant in Côte d’Ivoire. By Yasser Charafi, Bertrand de la Borde, Josiane Kwenda and Juliette Rose at the International Finance Corporation (IFC).