PFI Yearbook 2015 - Foreword
Welcome to the 2015 Thomson Reuters Project Finance International (PFI) Yearbook. The Yearbook is our annual publication in which we look at the events of 2014, through case studies and the PFI Awards, and look forward into 2015 with articles in the Global section of the book. This year we have interviewed and profiled a host of leading sponsors from the Americas, Asia-Pacific and Europe Middle East & Africa (EMEA) to take the market temperature – to see how the clients are viewing market prospects.
Skanska Infrastructure Development won two of the largest P3 deals in the history of the US market with the 1-4 Ultimate Project and the Midtown Tunnel, both closed within the past two years. As the group moves forward with a significant but disciplined pipeline of investments, its leader is pushing for financing mechanisms that can move the entire market forward. By Alison Healey.
First Gen Corp is one of the Philippines’ leading power generating companies and focuses on clean and renewable energy. The company, the power generation arm of the Lopez Group, operates in what is one of South-East Asia’s most deregulated power markets. First Gen’s president and chief operating officer, Francis Giles Puno, speaks to Jonathan Rogers.
With declining opportunities in North America and with Europe focused on renewables, Canada’s Northland Power is pinning its hope on the North Sea. By Adrian Murdoch.
GDF Suez could well be the largest corporate user of the project finance market by number of deals closed over the last decade, with €55bn raised in those 10 years. Through its evolution from Suez to GDF Suez and then its acquisition of International Power, the company has sought to use project finance to build up its asset base. By Rod Morrison.
The proposed three stages of the A$12bn WestConnex project in Sydney comprise one of the most ambitious and arguably one of the largest toll road projects in the country’s history. It will see a state government taking traffic risk, the Australian government providing a concessional loan and the private sector funding the rest. PFI’s Australian Editor John Arbouw talks with the chairman of the WestConnex Delivery Authority, Tony Shepherd.
Ireland is hoping to reach financial close on seven PPPs in 2015, only a year after exiting its eurozone bailout. Brian Murphy, head of procurement authority the NDFA, talks about how frustrations in the capital markets and the role of the EIB are new concerns. By Colin Leopold.
Banco Santander is one of the most active banks in Latin America, combining its global reach and local operations to pursue opportunities in the region. By Nic Stone.
Demand for the cashflows generated by renewable energy assets is accelerating the evolution of the yieldco sector on a global basis. Despite the fact that more than 900 funds own at least one yieldco, according to Lipper data, some market hopefuls have aborted attempts to jump on board. Joti Mangat reports.
With the LNG market being global, and Canadian projects competing with projects around the world, the key question is what is the appetite for major new capital LNG investment in Canada versus other jurisdictions? By Christopher Langdon, Paul Cassidy and Gordon Nettleton of McCarthy Tétrault and Stephen McWilliams of Latham & Watkins.
The proposed partial privatisation of the electricity distribution and transmission networks (Networks) in New South Wales announced by the State Government of New South Wales (State) will, if completed, mark the final phase of the privatisation of the electricity sector in New South Wales. By Shaun McGushin, partner, Corrs Chambers Westgarth.1
Committed project sponsors and a completion guarantee were among the stand-out features of the mammoth Cameron LNG financing that occupied much of the market for a good part of 2014. By Alison Healey.
The Freeport LNG Train 1 and Train 2 combined financing set a new high water mark for non-recourse construction project financings. By Jason Webber and Clark Wohlferd ofWhite & Case, andBrent Wahl, Nicholas Gole and Aaron Neus of Macquarie Capital.
Amid increasing concerns over climate change and global warming around the world, the Petra Nova carbon capture and storage/sequestration (CCS) project achieved financial close on August 1 2014 for what will be, when completed, the world’s largest implementation of post-combustion carbon capture technology on an existing coal-fired power plant. By Alec Borisoff, partner, and Daniel Lin, associate at Milbank Tweed Hadley & McCloy LLP.
The I-4 Ultimate Project represents Florida’s recent success in procuring the largest greenfield availability payment P3 to close to-date in the United States. By Yukiko Kojima, partner, and Patrick Harder, chair, Infrastructure Practice Group, Nossaman LLP.
On November 20 2014, the Texas Department of Transportation (TxDOT) successfully closed its innovative US$847.6m public-private partnership (PPP) for the Texas SH 183 managed lanes project with SouthGate Mobility Partners LLC (SouthGate), a Kiewit-led team, that brings to fruition a hybrid gap finance/DBOM (design-build-operations-maintenance) model unique to the US PPP market. By Joseph Seliga, partner, and Stephanie Wagner, associate, Mayer Brown, who advised TxDOT.
The financing of the 517MW Kelar project in Chile highlights the importance of being nimble and flexible in a putting together a successful deal in Latin America. By Nic Stone.
The successful financial close of the limited-recourse project financing for the integrated Roy Hill iron ore project in Western Australia marks an important development in the evolution of the financing of large-scale mining projects, both in Australia and globally. By Stephen McWilliams and Andrew Roche, Latham & Watkins, Garry Korte and Andrew Tsoulis, Roy Hill Holdings and Stephen Skinner, Hancock Prospecting.
The New South Wales Government’s long-term transport plan has taken a giant step forward with the financial close of the North West Rail Link Operations, Trains and Systems PPP, the largest PPP ever awarded in NSW. Allens partner Phillip Cornwell and senior associate Scott McCoy, who worked on the transaction, reflect on the drivers to bring such a significant project together and, in turn, set the groundwork for a major transformation of Sydney’s public transport system.
The Nam Ngiep 1 hydropower project (the Project) is the first cross-border project between Laos and Thailand to have reached financial close with a combination of multilateral, ECA and commercial bank investment since the refinancing and expansion financing of Theun-Hinboun (THPC) in 2008. By Laurent Margoloff, director, project debt advisory and finance APAC,Shinichi Yashiro, deputy head, export finance Japan, BNP Paribas, and Stephen Jaggs, managing partner, Bangkok office, and Sarah Wilson, senior associate, Bangkok office, Allen & Overy.
In February 2013, the NZTA evaluation team eagerly opened five expressions of interest for Transmission Gully, New Zealand’s largest PPP. On July 29 2014, the project reached financial close. By Geoff Daley, who led the financial advisory team on the project, head of advisory for the Australian Structured Finance Office at Bank of Tokyo-Mitsubishi UFJ Ltd.
Financing for the 150MW Burgos Wind Farm in the Philippines closed in October, a significant achievement by EDC’s project and finance teams. Developers and banks alike will welcome this sign of confidence in the Philippines renewables sector and its feed-in-tariff (FiT) scheme. By Jae Lemin,Herbert Smith Freehills, legal adviser to EDC, and Michael Lock, ANZ, intercreditor agent and mandated lead manager.
On November 5, infrastructure investor F2i and Edison completed an innovative partnership in the renewable energy sector in Italy. Have they possibly pioneered a new alignment of interests between financial and industrial operators? By Matteo Ambroggio, partner ofF2i – Fondi Italiani di Investimento.
Budapest Airport successfully completed a comprehensive €1.4bn debt refinancing and €1.1bn swap restructuring on September 25 2014, averting a potentially highly disruptive debt restructuring. By Tom Smyth, managing director and co-head of European Debt Advisory, Rothschild.
The project documents and financing agreements for the Moroccan Safi 1,350MW coal-fired power project were executed on September 17 and 18. For Nareva, Mitsui and GDF Suez (the sponsors of the project), ONEE (the tendering authority and off-taker), the banks and all advisers involved this marked the culmination of several years of hard work and perseverance. By Francois-Xavier Boul, senior vice president AIFA SAMEA and Stefano Terranova, Head of AIFA SAMEA, GDF Suez.
The Kirikkale IPP is the first merchant power plant financed by international banks with no completion support in Turkey. By Pascal Martese, executive director, acquisitions and project finance, andYunhe Lu, senior manager, acquisitions and project finance,ACWA Power.
IFC, a member of the World Bank Group, pioneered an innovative programme to finance renewables in Jordan as seven solar photovoltaic (PV) projects simultaneously signed, at the end of September 2014, financing packages worth a total of US$207.5m to construct 102 MWdc/91MWac across the country. By Christopher M Cantelmi, principal, IFC, and Matthew Wood, partner, White & Case.
At more than Ksh70bn Kenyan shillings – €623m/US$775m – Kenya’s Lake Turkana wind power project is the largest single private-sector investment in Kenya. At up to 310.25MW, it will be the biggest wind farm on the entire African continent. By Kaushik Ray, partner, Trinity International LLP.