Norton Rose advises on Singapore’s merchant power project

15 July 2011

Contacts

Norton Rose (Asia) LLP, the international legal practice, has advised the lenders on the flagship 800 MW combined cycle project being developed by the GMR Group at Jurong Island, Singapore. The deal was signed on Tuesday 12 July 2011.

Norton Rose (Asia) LLP advised the bank group, led by coordinating bank Standard Chartered Bank, and including Axis Bank, National Australia Bank (NAB), WestLB, CIMB and KfW, who have provided a S$670 million term loan facility and a US$270 million credit and working capital facility. The project is being developed by GMR Energy (Singapore) Pte Ltd, a subsidiary of GMR Infrastructure Ltd, and is due for completion in 2013.

The project is one the first merchant power plants in Asia developed by an independent power producer, competing to sell electricity into the Singapore power market. Gas for the project will be supplied by BG Singapore Gas Marketing Pte. Ltd. from  the Singapore LNG terminal, thus making the GMR Project a key customer of the LNG facility.

Singapore projects and energy partner, Stephen Begley, commented:

‘‘This is a landmark project in the Singapore power market and we are very proud to have assisted the Lenders and GMR Energy (Singapore) Pte Ltd, in achieving financial close. The project has been ongoing for almost 10 years and the development of the LNG terminal helped revitalise the project. The interaction with the contractual framework for the LNG terminal and the regulatory framework which underpins the liberalised gas and power markets in Singapore made the project even more complex and closing is a credit to the GMR Group and the banks.’’

Nick Merritt, Asia Pacific Head of Infrastructure, Mining and Commodities added:

‘We are delighted to have acted on this major project following our involvement in the financial close of the Singapore SportsHub project in August last year. In reaching financial close we have continued to develop our highly successful relationship with GMR having also advised ICICI on the closing of the US$30 million financing to one of their other subsidiaries, Homeland Energy Group Ltd, on 1 July 2011. This is the fifth time we have supported GMR by advising their banks.’

Mr. G.B.S Raju, Corporate and International Business Chairman of GMR Infrastructure said:

“I am delighted to receive the banking community’s strong support. It clearly demonstrates their confidence in the project. The financing structures are unprecedented in terms of complexity and tenor and will set a new benchmark for the power sector. With the support of all stakeholders, we were able to execute the financing documents, satisfy all conditions precedent and attain the first drawdown of funds within a matter of days. This impressive achievement is a good start and augurs well for the project.”

Commenting on the transaction, Madhu Terdal, President - New and Emerging Business, GMR Group, said:

‘‘GMR are delighted to have achieved this significant milestone to commence the next stage of development. We are particularly grateful for the efforts of the Norton Rose team in advising the Lenders and helping reach financial close.’’

Stephen Begley, Partner, led the Norton Rose (Asia) LLP team with support from Partner, Nick Merritt. The team was supported by Hannah Logan, Nicky Davies, Jenida Satem, Carla Macksey, Laurie Pearson, Pooja Balani, Pamela Ng, Yu-En Ong, Jane Cheong, Matthew Escritt, Ferzana Haq, James Atkinson, Kirsty Nuttall, Anna Tipping, KC Lye, Guy Spooner, Daniel Perera, Anna Smirnova and Katie Knowles. Hong Kong Partner, Chris Redden advised Axis Bank and Standard Chartered Bank on certain intercreditor issues.

Lee & Lee advised the Lenders on property law aspects of the transaction.

White & Case advised GMR Energy (Singapore) Pte Ltd supported by Rajah and Tann LLP.

For further information, please contact:

Lorraine Lee, Regional Communications Manager, Norton Rose Hong Kong
Tel: +852 3405 2324   Email: lorraine.lee@nortonrose.com

Michael Chambers, Business development manager, Norton Rose (Asia) LLP
Tel: +65 6309 5453 Email: michael.chambers@nortonrose.com