Baker Mckenzie Thailand Advises On Syndicated Project Financing Of Seven SPP Power Plants.
Legal News & Analysis - Asia Pacific - Thailand - Regulatory & Compliance
19 October 2020
Baker McKenzie Thailand represented five syndicated lenders in six project financings of seven power plants across the country as part of the Electricity Generating Authority of Thailand's (EGAT) third-generation small power producer (SPP) program and SPP replacement program. The key sponsor of these project companies is B. Grimm Power Public Company Limited.
The Baker McKenzie team was led by Vit Vattanayothin, the project finance partner in the Bangkok office. Vit was supported by Senior Associate Napas Na Pombejra and Associates Cheewin Chiangkan, Sawaporn Sophanodora, Pranisa Chinkulkitniwat, Hongrat Jungwanitchakun and Sitikorn Tangsiri. The team had led negotiations over a six-month period, where multiple and complex terms and conditions addressing risks associated with heavy reliance on revenue stream generated from industrial user energy agreements as opposed to that generated from the EGAT power purchase agreement, some features of which have set precedence on the risk mitigation aspect for future SPP replacement projects. The replacement projects also entail the first ever use of gas typically supplied by PTT Public Company Limited and partly supplied by LNG imported by B.Grimm's subsidiary.
The lenders, consisting of Bangkok Bank Public Company Limited, Export-Import Bank of Thailand, Government Savings Bank, KASIKORNBANK Public Company Limited and The Siam Commercial Bank Public Company Limited, financed approximately THB 30 billion for the following projects:
Two blocks of a gas-fired power plant built under the third-generation SPP program located in World Food Valley Industrial Estate, Ang Thong Province
Five gas-fired power plants built under the replacement program granted by EGAT, located in Laem Chabang Industrial Estate, Chon Buri Province, Amata City Chon Buri Industrial Estate, Chon Buri Province and Asia Industrial Estate, Rayong Province under the SPP replacement program.
These seven power plants will generate electricity of up to 980 megawatts in aggregate; supply up to 90 megawatts to EGAT, for each plant built under the third-generation SPP program; supply up to 30 megawatts to EGAT, for each plant built under the SPP replacement program; and supply the remainder to industrial users.
Commenting on the deal, Vit said: "These transactions entail one of the most heavily negotiated project financings in small power producer sector and we are pleased to have been able to bring our substantial experience in project financing in the power sector to the table and work closely with all relevant stakeholders to solve numerous difficult negotiating issues and successfully bring the deal to satisfaction and fruition for our clients."