The London, Beijing and Sydney offices of international legal practice Norton Rose Group have advised the European Bank for Reconstruction and Development (EBRD) and the Netherlands Development Finance Company (FMO) on their US$85 million debt financing of Mongolia’s first renewable energy independent power project. The project reached financial close on 17 July 2012.
The 50MW Salkhit wind farm is located 70km south east of the Mongolian capital Ulaanbaatar and is part of a renewable energy programme intended to reduce the country’s dependence on coal. The project is expected to become operational in 2012.
Once operational, the project is expected to supply almost 5 per cent. of Mongolia’s electricity, where energy demand is currently increasing by 8-10 per cent. per year. The project is also in the process of receiving Clean Development Mechanism accreditation and Norton Rose Group advised the lenders on securing the carbon revenues generated by the project.
The project has been developed and sponsored by Mongolia’s Newcom LLC, which retains a majority interest in the Mongolian project company, Clean Energy LLC. EBRD and FMO, together with GE Pacific Private Limited, acquired equity interests in Clean Energy LLC in March 2012.
Teams from across Norton Rose Group worked with the financiers, sponsors and suppliers to achieve a tight equity financing deadline which helped construction of the project to progress in Mongolia’s truncated summer construction season.
Jeffery Barratt, partner, Norton Rose LLP, commented:
“The project required us to field teams from our London, Beijing and Sydney offices, with our team in Sydney and our London-based New York lawyers brought in to advise as the project developed. This is another example of our ability to meet the needs of a transaction as it evolves by drawing on the expertise and experience of our lawyers throughout the Norton Rose Group. It reinforces the strength of our capability to close major first-in-country energy project financings.”
“The project presented a number of interesting challenges for both the sponsor and the lenders but all parties worked closely together to get this deal over the line.”
“Reaching financial close of this project is a significant milestone for Mongolia’s energy sector as it seeks to reduce reliance on fossil fuels. The project is likely to act as a template for further private sector interest in the country’s renewable sector and demonstrates the benefits that the Mongolian government has derived from putting in place a number of important legal and regulatory measures to support the development of renewable energy.”
London based partner Jeffery Barratt led the transaction and advised EBRD and FMO on the financing of the project together with senior associate Chris Down and associate Christina MacGilp, with support from trainee solicitor Prakruthi Panchalingegowda. Associate Gemma Pike advised on carbon finance aspects of the transaction. Partner Richard Hill and associate Kate Freeman advised on the construction aspects of the projects and New York law security advice was provided by partner Tom Vita and associate Alex Hirshfeld. Sydney partner Dan Marjanovic advised on New South Wales security and tax law together with senior associates Tim Mornane and Claire Falkner. Beijing partner Tom Luckock advised the lenders on the due diligence aspects of the project.
Mongolian law advice was provided to EBRD and FMO by GTs Advocates LLC.
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