Herbert Smith Freehills has advised Energy Development Corporation (EDC) on its US$315 million financing of the 150 MW Burgos Wind Farm Project (Burgos).
Burgos is the largest wind farm developed in the Philippines to date and the financing represents not only the first international project financing of a wind farm project in the Philippines to reach financial close but also the first time that the Feed in Tariff (FiT) recently introduced by the Philippines Government has been banked.
The financing utilised a combination of a US Dollar and Philippine Peso debt provided by a combination of international and Philippines banks, with the support, in the case of the US Dollar denominated facility, of Eksport Kredit Fonden, the Danish export credit agency. The international banks consist of Australia and New Zealand Banking Group Ltd., DZ Bank AG, ING Bank NV, Malayan Banking Berhad and Norddeutsche Landesbank Gironzentrale. Local lenders consisted of PNB Capital and Investment Corp., SB Capital Investment Corp., BDO Unibank Inc., Land Bank of the Philippines, Philippine National Bank and Security Bank Corp.
Occupying a 600 hectare site, Burgos is one of the largest investments to date in Ilocos Norte. Once operational, Burgos will generate electricity for about 2 million households.
The Herbert Smith Freehills team for the project financing was led by partners Brendan Quinn and Fergus Smith, who were supported by Jae Lemin, Ged Cochrane, Celine Yim, Tim Hamilton and Rory Wilson.
Fergus commented:
“This successful financing show that the Philippines’ FiT scheme is bankable with both domestic banks and international financiers in the region. The fact that EKF, as an export credit agency, was willing to provide financing is also a significant vote of confidence in the Philippines’ FiT scheme and the Philippine energy market more broadly.”
Brendan commented:
“We would like to congratulate EDC on achieving financial close. This is a ground-breaking deal which underlines our client’s long-term strategy to be Philippines’ leading diversified renewable power company. Since the FiT scheme is untested, this transaction provided us with the opportunity to demonstrate not only our sector expertise, but also our ability to develop innovative, practical and ultimately bankable solutions for our client.”
Herbert Smith Freehills has a long-standing relationship with EDC. The firm started acting for EDC on Burgos in 2010, advising the client on the tender process for the engineering, procurement and construction contract, maintenance arrangements and on the 42 kilometre transmission line, which connects the wind farm from the Burgos substation to the Laoag substation of the National Grid Corporation of the Philippines.
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