Milbank, Tweed, Hadley & McCloy LLP advised Senior Lenders comprising Export Credit Agencies Japan Bank for International Cooperation, The Export Import Bank of Korea (KEXIM) and Nippon Export and Investment Insurance (NEXI); and International Commercial Lenders ING Bank, Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation (SMBC) and The Bank of Tokyo-Mitsubishi-UFJ, Ltd. (BTMU), in connection with the multi-billion dollar development by PT Cirebon Energi Prasarana (CEPR) of the 1,000 MW expansion of the Cirebon coal-fired power plant in West Java, Indonesia. CEPR is owned by Marubeni Corporation, JERA Co., Inc., Korea Midland Power Co., Ltd., PT Imeco Inter Sarana, PT Indika Energy Tbk and Samtan Co., Ltd.
The total financing committed to the Project is approximately US$1.7 billion and is supported by a multi-jurisdiction collateral package. In addition, the loans provided by the International Commercial Lenders are covered by insurance from NEXI and a guarantee from KEXIM.
The Project is being constructed with ultra-supercritical technology and, once built, will be one of largest coal-fired expansion projects in Asia. The electricity generated by the Project will be sold to PT PLN (Pesero), Indonesia’s state-owned power utility, for 25 years.
Partner James Murray led a Singapore-based team of project finance attorneys, including James Orme, Andrew Gibb, Rosaline Yusman, and Jooyoung Song with additional assistance from partner Alec Borisoff and associates Kristina Hokenberg and Anthony Scott in Tokyo and New York. In addition to the team advising the Senior Lenders, Tokyo-based partner Aled Davies, together with project finance attorneys Andrew Pendleton, John Inglis and Aaron Mundy advised Mizuho Bank, Ltd., BTMU, Sumitomo Mitsui Trust Bank, Limited, and JPMorgan Chase Bank, N.A. on the equity bridge financing.
James Murray said: “We are extremely pleased to have advised this leading group of lenders and insurers on such a significant and high-profile project. The financing was successfully closed at a time when a number of new power-sector regulations were being implemented in Indonesia and Milbank was delighted to have helped navigate various structuring complexities.
“This financing is another great example of our global offices working together in a closely coordinated and integrated manner. Milbank’s experience advising on project financings in Indonesia spans over two decades and it was gratifying to put our team’s deep knowledge into practice,” added Aled Davies.
Earlier in 2017, Milbank advised sponsors on the financing of the 80 MW Muara Laboh Geothermal IPP, the sponsors on the financing of the 200MW Kalsel coal-fired IPP and lenders providing financing for the acquisition of Chevron’s geothermal assets in Indonesia. In addition, Milbank advised on the project financing for the original Cirebon 660 MW IPP in 2010.
Read more about Cirebon Expansion via Project Finance International.
