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Landmark Banten IPP Project Reaches Financial Close.

12 December, 2013

 

The Banten IPP Project reached financial close on December 6, 2013, signing within approximately six months of kick-off and closing within seven months of signing. 

 

Shearman & Sterling advised the lenders, Malayan Banking Berhad, EXIM Bank of Malaysia, CIMB Bank, Citibank and RHB Bank in a US$730 million financing in favour of the project company, PT Lestari Banten Energi, for the design, engineering, construction and operation of the 660 MW coal-fired IPP in Banten, West Java, Indonesia. Genting Power Holdings Limited is the Sponsor of the project.

 

This is a precedent setting transaction, being the first IPP in Indonesia financed in the international debt markets without the provision of any Government support for the state electricity utility PT PLN’s obligations under the Power Purchase Agreement, signaling the achievement of a major milestone for the Indonesian power sector.  The project also involved a Chinese EPC contractor and saw parties working across five jurisdictions to complete an international standard project financing. 

 

Commenting on the transaction, Bill McCormack from Shearman & Sterling noted: “This is ground-breaking for a power project financing in Indonesia. It was also a considerable achievement to reach financial close within such a short time period in comparison with other financings closed in Indonesia in recent years.” 

 

The Shearman & Sterling team included partners Bill McCormack and Sanja (Sonny) Udovicic, and associates Alfred Ng, Chad Passlow and Laleh Shahabi.

 

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