Weekly Closer: Middle Eastern energy on top

A single mega-deal in Oman was the only transaction to top $1bn this week.

Twelve financial closes were reported by our sister platform IIassets.com this week, half of which took place in Western Europe. But the largest deal of the week – and the only infrastructure mega-deal reported – took place in the Middle East.

The energy sector led by value and renewables by volume, though three of four closes in the latter came in with no financial details. The largest acquisition of the week was in the transport sector. 

Energy | Total deal flow = $1,627.4 million 

The $1.05 billion Sohar 3 and Ibri PPP Project involving two Omani IPPs reported reaching financial close on 18 March this week with provision of $300 million debt from Sumitomo Mitsui Banking Corp. Allen & Overy advised the borrower and Shearman & Sterling advised the bank. Mitsui is the majority shareholder in the project at 50.1 percent, followed by ACWA Holdings with 44.9 percent and Dhofar International Development & Investment Holding at 5 percent. 

Both Sohar and Ibri are scoped for the design, construction, operation and maintenance of two gas-fired plants on a 15-year build-own-operate basis with capacity of 1450 and 1700MW, respectively (3,150MW total). Sohar is set to enter operations in January 2019, with Ibri following three months later.

With support from multilaterals including Japan Bank for International Cooperation and Nippon Export and Investment Insurance, it was reported this week that the 315MW Lontar Ultra Supercritical Coal-Fired Thermal Power Project reached financial close on 14 March. The $450 million Indonesian project is being propped up with two loans totaling $315 million to PT Perusahaan Listrik Negara from JBIC with SMBC as facility agent. In the first, for $179 million, JBIC is provided $172 million and SMBC $7 million; in the second, for $144.11 million, JBIC is providing $86.11 million, with SMBC bringing $58 million to the table. Both loans have a tenor of 15 years and six months.

The Eeco Energy Efficiency Project, which touches on several industrial sites across France and Italy, reached financial close on 23 March with the provision of a $75.68 million loan led by SMBC. Green Giraffe Energy Bankers financially advised on the loan process, with Herbert Smith Freehills advising the borrower legally and De Pardieu Brocas Maffei as bank legal adviser. BTMU acted as facility agent on the loan to Eeco Holding, and SMBC itself provided $37.84 of the loan. Construction on the project was set to start on 1 March and commercial operations are expected to commence on 1 January 2017. Project sponsors, who each hold 33.3 percent of the project, include CDC Infrastructure, Marubeni Corp and Solvay Energie France. Solvay Energy Services and Solvay Specialty Polymers Italy are the developers. 

Transportation | Total deal flow = $918.65 million 

DP World's London Gateway Port Refinancing reached close on 24 March through a $836.2 million 30-year term loan from a club of four lenders. Legal & General Retirement led the loan, providing $360.43 million of the debt, followed by Pension Protection Fund's $216.26 million, MEAG Munich Ergo Asset Management's $158.59 million, and German Doctors Pension Fund's $100.92 million. The refinancing bolsters the existing project finance facility and funds development of the port's third birth.

The Republic of Togo and Kuwait Fund for Arab Economic Development signed a loan agreement on 27 March for the construction of the Sokode Bassar Road PPP Project. Abu Dhabi Fund for Development, Arab Bank for Economic Development in Africa and the OPEC Fund for International Development were also among the multilaterals to support the $24.79 million project through a $19.12 million loan. The loan has a period of 23 years including a five-year grace period which will be amortised in 36 semi-annual installments.

Social Infrastructure | Total deal flow = $75.58 million

The Kuwait Fund for Economic Development signed a $10 million loan agreement with the Government of the Democratic Socialist Republic of Sri Lanka on 24 March to finance the construction of the $14.6 million Eastern University Healthcare Sciences Building Complex PPP Project. The 25-year loan bears an interest rate of 1 percent per annum in addition to 0.5 percent per annum to cover administrative costs and other expenses. The loan includes a five-year grace period and is set for amortisation through 40 semi-annual payments.

The Nordic Investment Bank signed a $12 million loan agreement with the city of Kajaani, Finland, to finance the $24 million Kajaani Multipurpose School and Community Centre Project. The project calls for the construction of a school with capacity for 800 primary education students and 84 day care children as well as a library that will double as a public library.  Facility construction is expected to be completed in spring 2016 and the remainder of the work to be completed is set to wrap before 2017 end. 

Renewables | Total deal flow = $64.73 

The only renewables deal to report financial details of its close this week was the $64.73 million Quixwood Moor Wind Farm Project, which closed on 23 March. The NTR-sponsored, 27MW UK project was fully supported by a loan of the same amount from the Royal Bank of Scotland, which Pinsent Masons advised on the borrowing side and Burges Salmon advised on the bank side. The project will be developed by RJ McLeod, who will deploy 13 2.05MW turbines expected to produce enough electricity to power roughly 17,000 homes. Natural Power acted as technical advisor in the deal. 

Four renewable deals were reported to have closed this week without financial details. The first was the SWIF Bulgaria Two Solar Projects Acquisition, which closed on 21 March, when ReneSola sold the projects to Solar World Invest Fund. On 23 March, Caisse des dépôts closed its 49.9 percent stake acquisition in the 99 MW Aalto Power portfolio from Infravia Capital. On the same day, CEE completed the Homestead Solar Park Acquisition (an 18MW project) from BayWa. Also on 23 March, Duke Energy Renewables completed the Longboat Solar Power Project Acquisition (a 20MW project) from EDF Renewable Energy.