Transaction Marks the First Turkish Non-Recourse Power Loan To Reach The Bank Market Since The Middle of 2000
LONDON, ENGLAND, February 11, 2004 – Underscoring its leadership in power project financing and development in Turkey, the international law firm Milbank, Tweed, Hadley & McCloy LLP represented the project company and its sponsors, Suez-Tractebel of Belgium and Mimag of Turkey, in the close of the $475 million financing for the Baymina power project near Ankara, Turkey. The transaction was signed (but not officially closed) in 2002, and was recognized as Project Finance International’s “ EUROPE, MIDDLE EAST AND AFRICA POWER DEAL OF THE YEAR” in 2002.
Commenting on the transaction, Phill Fletcher, head of Milbank’s London office and partner in the firm’s Global Project Finance Group, stated, “The first Turkish non-recourse power loan to successfully close since mid-2000, the Baymina project indicates the market’s renewed interest in power projects in this region. This transaction confirms Milbank’s leading role in the Turkish projects market. As early as 1996, we acted for the sponsors on the DM 2.4 billion Birecik hydroelectric project, the first Turkish independent power project to reach financial close, and subsequently we have advised lenders and sponsors on numerous other Turkish power sector projects, including the commercial bank lenders on the Mamara Ereglisi project in 1997, the first thermal power BOT project to reach financial close.”
The $475 million, 13-year project loan will be used to refinance the construction costs of a new-build 760 MW power plant near Ankara, Turkey. The project, about 24 miles outside Ankara, will connect via a substation to Turkey’s 380-kv grid with good connections to most parts of the country. It is also within two miles of the main gas pipeline feeding the Ankara region.
The bank syndicate financing the loan included ABN AMRO, BNP Paribas, Credit Agricole Indosuez, Fortis Capital, ING, Société Générale and Westdeutsche Landesbank. Political and other coverage will be provided by the US Eximbank, Germany’s Hermes, Belgium’s OND, Austria’s OeKB and MIGA, of the World Bank Group.
The Milbank team representing the sponsors was led by London lawyer Agnieszka Klich and included Phill Fletcher, Ozgur Can and Patrick Holmes.
An integral part of Milbank’s renowned Global Project Finance Group, the London team advises under both English and U.S. law on sophisticated transactions across a broad range of industries on projects in the UK, Continental and Eastern Europe, the Middle East, Africa, the CIS and the Indian sub-continent. Recent significant power-sector transactions include:
- Representing the creditors in the ₤1.3 billion debt restructuring of Drax, a 4,000 MW coal fired power station in Yorkshire, England, one of the largest and most complex refinancings in the power industry to date, involving multiple creditors in several jurisdictions as well as the sale of a 38% equity stake in Drax Holdings to International Power.
- Representing the lenders on the US$1.8 billion debt financing of the Umm Al-Nar independent water and gas project, the largest power project financing in the Middle East with the largest ever Sharia compliant Islamic financing tranche.
- Representing the sponsor, Hellenic Petroleum, in the development and financing of the €250 million Thessaloniki independent power project, a 390 MW power plant, the first gas-fired independent power project in Greece.
- Representing the European energy consortium in the syndicated financing related to the €852.7 million acquisition of Interpower SpA, the first time an Italian “Genco” has secured medium term financing from the start.
- Representing the sponsor, Viridian Group plc (the Northern Ireland utility), in the € 220 million Huntstown Power Project, a 343 MW power plant near Dublin - the first independent power project to reach financial close in the Republic of Ireland.
Milbank’s London office is also widely recognized for its leading role in some of the most complex and sophisticated European merger and acquisition, high yield and structured financings and was awarded Legal Business Magazine’s “BANKING AND FINANCE TEAM OF THE YEAR FOR 2002.”
Milbank, Tweed, Hadley & McCloy LLP is a leading global law firm headquartered in New York, with offices in Washington, DC, Los Angeles, Palo Alto, London, Frankfurt, Tokyo, Hong Kong and Singapore. Milbank is a recognized leader in capital markets, corporate finance, project finance, acquisition finance, and other major fields of legal practice. The Firm's practice includes cross-border mergers and acquisitions and global capital markets transactions as well as assisting multinational clients with their cross border investments. Milbank provides both English and New York law capabilities to its clients, and a full range of services to many of the world’s leading financial, industrial and commercial enterprises, as well as governments, institutions and individuals.