The Asian Development Bank (ADB) and the Industrial and Commercial Bank of China (ICBC) have collaborated with Japanese sponsors and China’s Datang Corporation to provide a multi-tranche renminbi financing for a wind farm in China’s Inner Mongolia autonomous region.
The deal allows China to produce cleaner energy.
It is also hoped that the purely local currency financing under parallel facilities provided by ADB and ICBC – and supported by limited shareholder guarantees – will provide a model for future collaborations between state-owned enterprises and foreign investors in renewable energy projects in China.
The financing was made up of an Rmb164 million (US$24 million) facility from ADB and an Rmb170 million (US$24.9 million) facility from ICBC.
This was provided to Datang Sino-Japan (Chifeng) Renewable Power Company, a joint venture between Japanese sponsors Sumitomo Corporation and Kyushu Electric Power Company and China’s Datang Corporation.
Norton Rose advised the Manila-based finance institution on the Inner Mongolian wind farm. Singapore-based partner Nick Merritt and Beijing-based partner Tom Luckock led the team at the UK firm, which advised ADB on its recent wind power financings in India for the CLP group. Capital Associates advised ADB on PRC law issues.
Tokyo-based Asian project finance head Gary Wigmore led the Milbank team, which included Beijing-based senior projects attorney Jeff Layman, advising Sumitomo Corporation and Kyushu Electric. Runming Law Firm provided the Japanese sponsors with PRC law advice.
Momo-o Matsuo & Namba acted as Japanese counsel to Sumitomo Corporation with Atsumi & Partners acting as Japanese counsel to Kyushu Electric. Mizuho Corporate Bank was financial adviser to the Japanese sponsors. China’s Datang Corporation turned to a team from Simmons & Simmons.
The proposed wind farm is expected to provide electricity to the national grid, while reducing carbon dioxide emissions by a projected 140,000 tonnes per year, at a total project cost of US$73 million.