Norton Rose Fulbright advises Enel Green Power on 3.5bn South African Rand financing for five wind farms

Global law firm Norton Rose Fulbright has advised Enel, through its subsidiary Enel Green Power RSA (EGP RSA), the Enel Group’s South African renewables company, on the multi-tranche financing facilities for a portfolio of five wind projects in South Africa. The portfolio totals approximately 700MW of capacity at an estimated value of approximately €950 million.

Norton Rose Fulbright advised Enel Green Power RSA Proprietary Limited (EGP RSA), as sponsor, and Enel Green Power RSA 2 (RF) Proprietary Limited (EGP RSA 2), as borrower. The portfolio consists of five projects: with three wind farms located in the Northern Cape Region: Garob (138MW), Karusa (142MW) and Soetwater (142MW); and two wind farms located in the Eastern Cape Region; Oyster Bay (142MW) and Nxuba (142MW).

The financing arrangements are unique for the African project finance market as this was implemented under a holding company (HoldCo) structure, with all facilities provided to one vehicle and on lent to the projects. Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division and Absa Bank Limited (acting through its Corporate and Investment Banking division), provided all the relevant facilities including the related hedging. Absa Bank Limited has been appointed as facility agent for the projects.

Norton Rose Fulbright advised Enel and the projects on a wide range of issues related to this innovative financing, including:
i.The structuring and negotiation of the finance documents and related hedging and security with the lenders.
ii.The structuring, drafting and negotiation of 35 project contracts with numerous counterparties, including contracts and agreements relating to the supply and installation of wind turbines and connected equipment, design and construction of the civil and electrical balance of plant, management and maintenance, services availability, asset management, and other general services.
iii.The structuring, drafting and negotiation of intergroup contracts and agreements with minority stakeholders in the five special purpose vehicles, including local partners Pele Energy Group, Khana Energy Proprietary Limited and trusts formed by local communities where the projects will be built.

Arturo Sferruzza, partner, Norton Rose Fulbright, who led on the transaction commented:

“Following our work for Enel Green Power in relation to Round 3 of South Africa’s Renewable Energy IPP Procurement Programme (REIPPPP), we are delighted to have assisted Enel Green Power on the successful completion of this innovative and complex transaction. Working across several jurisdictions and under a very tight timeframe, we helped Enel Green Power implement a first-of-its-kind financing structure, which will support the growth of our client’s business and investments in Africa.”

The multi-jurisdictional Norton Rose Fulbright team was led by Milan-based partner and head of banking and energy, Italy, Arturo Sferruzza. The Italian team further comprised Luigi Costa and Elisabetta Negrini (of counsel) and Enrica Pagani (senior associate). The team in South Africa was led by Jackie Midlane, Head of Banking and Finance, and Ross Lomax, Head of Corporate, and were assisted by a team made up of directors; Pieter Niehaus, Gary Rademeyer, Tina Costas and Riccardo Petersen; and senior associates Raghemah Hendricks, Chloe Merrington; Sarah Norman and associates Katrijn Thys, Jane Hoffe, Jonathan Hock and Jonathan Arumugam.

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