BEIJING/TOKYO, July 9, 2009 – Milbank represented Sumitomo Corporation and Kyushu Electric Power Company, the Japanese sponsors of a 12,000 sq m, 50 MW wind farm in China’s Inner Mongolia Autonomous Region, on a unique multi-tranche RMB financing under facilities provided by the Asian Development Bank (ADB) and the Industrial and Commercial Bank of China (ICBC). The proposed wind farm is expected to provide electricity to the national grid, while reducing carbon dioxide emissions by a projected 140,000 tons per year, at a total project cost of $73 million.
The financing was made up of an RMB 164 million ($24 million) facility from ADB and an RMB 170 million ($24.9 million) facility from ICBC provided to Datang Sino-Japan (Chifeng) Renewable Power Co., a joint venture among the Japanese sponsors and China’s Datang Corporation. The deal was novel in being structured as a purely local currency financing under parallel facilities provided from ADB and ICBC, supported by limited shareholder guarantees.
“China is a heavy consumer of energy and is increasingly turning to renewable sources to address its energy and environmental needs,” said Gary S. Wigmore, Tokyo-based head of Milbank’s Asian project finance practice. “This was a complex transaction requiring close coordination between our Beijing and Tokyo offices and a clear grasp of the needs of multilateral and local bank financings, but its successful conclusion will allow China to produce cleaner energy and could be a model for similar renewable energy projects in China.” Beijing-based senior projects attorney Jeff Layman and Tokyo-based associate Tim Mackey also worked on the deal.
Other firms involved in the deal included: Norton Rose (ADB’s counsel); Runming Law Firm (Japanese Sponsor’s PRC counsel); Capital Associates (PRC counsel to ADB); Simmons & Simmons (Datang’s counsel); Atsumi & Partners (Japanese counsel to Kyushu Electric); and Momo-o, Matsuo & Namba (Japanese counsel to Sumitomo Corporation). Mizuho Corporate Bank was the financial advisor to the Japanese sponsors.
Milbank, Tweed, Hadley & McCloy LLP is a leading global law firm that for more than 140 years has provided innovative legal solutions in many of the world’s largest, most complex and innovative transactions. Our transactional expertise includes Project Finance, Acquisition Finance, Capital Markets, Corporate Finance and other major fields of law practice. Headquartered in New York, Milbank has 10 offices worldwide, including Beijing, Hong Kong, Singapore and Tokyo.