Milbank Makes it a One, Two, Three by Advising on Fujairah F2 IWPP, the World's Second Largest IWPP

News
December 18, 2007

LONDON, 18 December 2007 – International law firm Milbank, Tweed, Hadley & McCloy LLP has advised Fujairah Asia Power Company P.J.S.C. on the Fujairah F2 IWPP, the world’s second largest Independent Water and Power Project and the biggest power and water project financing ever undertaken in the United Arab Emirates.

The project financing of US$2.8 billion, with a 22-year debt, was lead arranged by Calyon, Citigroup and SMBC who are underwriting the US$900 million commercial debt. Japan Bank for International Cooperation (JBIC) is also providing a US$1.3 billion direct loan. There is circa US$550 million in equity funding which will initially be injected by way of an equity bridge facility provided by the commercial banks. The project will be owned by Abu Dhabi Water and Electricity Authority (ADWEA) (60%), International Power (20%) and Marubeni (20%).

Fujairah F2 will be built at Qidfa in the emirate of Fujairah. Construction has begun with full notice to proceed issued to Alstom, the EPC Contractor, at financial close. The project will comprise a 2,000MW power plant and a 130-million-gallons-per-day desalination facility, both of which are to be operational by 2010.

The deal was signed on 13 September in Abu Dhabi with representatives from ADWEA, the international sponsors, JBIC, Citigroup, Calyon and SMBC. Today, the project achieved financial closing.

The Milbank team was led by London-based partner John Dewar and associates Barry Burland, Richard Keenan, Fiona Gulliford, Kinnari Bhatt and Claire Wilby.

Milbank has now advised on the world's three largest IWPPs

Milbank also advised on the US$4.1 billion Marafiq IWPP in Saudi Arabia, representing the commercial bank lenders and Islamic banks, including lead arrangers BNP Paribas, Gulf International Bank and Samba, as well as the Korean Export Insurance Corporation. This is the world’s largest independent water and power plant. The financing included a $600 million Shariah-compliant tranche – the largest Islamic financing in the power and water sector to date.

Milbank recently represented the lenders in a US$231 million expansion to the Shuaibah-3 IWPP by way of a further sea water desalination plant. The original US$2.2 billion Shuaibah-3 IWPP is the world’s third largest independent power and water plant.

John Dewar, a partner in the London office, stated, “These three projects have done much to confirm Milbank’s traditional strength as sponsors’ and lenders’ counsel in complex project financings in both the power and water markets.”

About Milbank

Milbank’s Project Finance Team has recently won the ‘Chambers and Partners – Global Projects & Energy Law Firm of the Year’ for the second year running. Milbank was also recently recognised as the ‘European, Middle East and Africa Project Finance Team of the Year’ by the International Financial Law Review. Milbank has been designated as among the 1st Tier of project finance practices in London and globally by Chambers & Partners Directory.

Milbank, Tweed, Hadley & McCloy LLP is a preeminent global law firm that for more than 140 years has provided innovative legal solutions in many of the world’s largest, most complex, “first-ever” corporate transactions and litigation. Our transactional expertise includes capital markets, corporate finance and transactions, project finance, acquisition finance, and other major fields of law practice. Milbank litigation teams resolve disputes involving mergers and acquisitions, proxy battles, financings and securities offerings, intellectual property, white collar crime, and corporate restructurings, among others. Our clients range from prominent multinational financial, industrial and commercial enterprises to governments, institutions and individuals. The firm is headquartered in New York, with offices in Los Angeles, Washington, DC, London, Frankfurt, Munich, Tokyo, Hong Kong, Singapore and Beijing.

Contact

John R. Dewar
T:  +44-207-615-3004
JDewar@milbank.com