Global law firm White & Case LLP is representing Empresa de Generación Huallaga S.A., as borrower, and Odebrecht Energia S.A., as sponsor, in the development, construction and project financing of the US$1.2 billion 406 megawatt (MW) Chaglla hydroelectric power generation project in Peru. The deal signed on July 5, 2013.
“Our ability to draw on a team of specialist lawyers from across White & Case’s global network enabled us to address the complexities that were presented when structuring this transaction,” said Art Scavone, head of White & Case’s Global Energy, Infrastructure and Project Finance practice.
The run-of-the-river plant is being constructed on the Huallaga River in the Chaglla and Chinchao districts of the department of Huánaco. The project consists of a 400 MW main power plant and a 6 MW auxiliary plant, a 127 kilometer long, 220 kilovolt transmission line, 34 kilometers of permanent access roads, a 202 meter concrete faced rockfill dam, a surface powerhouse and diversion, spillway and headrace tunnels.
“White & Case has been at the forefront of leading energy and infrastructure projects across Latin America and this deal is a prime example of our work,” said Someera Khokhar, Americas regional section head of White & Case’s Global Energy, Infrastructure and Project Finance practice. “The Chaglla Project will significantly impact Peru’s economic development and create thousands of jobs while also increasing Peru’s electric generation capacity needed for Peru’s rapidly growing economy.”
The project financing raised a total of US$774 million in senior secured debt commitments, led by two anchor agency lenders (Banco Nacional de Desenvolvimento Econômico e Social – BNDES from Brazil and the Inter-American Development Bank), with the participation of six additional commercial banks. The financing structure provides for a number of unique features for a project of this type, including limited contingent equity sponsor support and no completion guaranty.
“We are honored to have played a role in this fundamentally important, groundbreaking, clean energy project in Peru,” said Carlos Viana, White & Case’s lead partner on the project. “Once completed in 2016, this project will be Peru’s third largest hydropower facility and will provide approximately 13 percent of the country’s installed hydropower.”
The borrower’s and sponsor’s legal teams were led by in-house counsel Ricardo Weyll and the White & Case team was led by partner Carlos Viana, with assistance from partners Richard Burke, Ian Cuillerier, Sean Goldstein, Fernando de la Hoz, Richard Horsch and Raymond Simon; counsel Steven Ross and associates Thomas Pate, Lauran Guijarro, Seth Kerschner and Donal Luna.
White & Case’s Global Energy, Infrastructure and Project Finance practice is regularly a lead advisor on major renewable energy projects in the Americas, including:
- Oaxaca Dos and Oaxaca Cuatro Wind Farms – Representation of the initial purchasers in connection with the Rule 144A/Regulation S issuances by CE Oaxaca Dos, S. de R.L. de C.V. of US$148 million 7.25% senior secured notes due 2031 and by CE Oaxaca Cuatro, S. de R.L. de C.V. of US$150 million 7.25% senior secured notes due 2031. Located near Oaxaca, Mexico, the Oaxaca Dos and Oaxaca Cuatro projects each generate 102 MWs of power. These were the first two project bond offerings for wind farm projects in Mexico. This transaction was selected as “2012 Latin American Project Bond Deal of the Year” by Project Finance magazine.
- Hidrosogamoso Hydroelectric – Representation of ISAGEN, one of Colombia’s state-owned power generation companies (Colombia’s third-largest power generation company), in connection with the development and financing of the 820 MW Hidrosogamoso Hydroelectric Project in Colombia. This project was financed through Banco Santander S.A. with political and commercial risk insurance by Euler Hermes; a US$250 million OPIC-insured senior credit facility; a US$450 million bond offering in the local capital markets; a US$815 million syndicated local bank Peso-denominated facility; and a US$66 million JBIC export-credit financing.
- Desarrollos Eólicos Mexicanos de Oaxaca 1 – Representation of the lender group led by Mexican governmental development bank Nacional Financiera (Nafin) in the approximately US$160 million financing to Desarrollos Eólicos Mexicanos de Oaxaca 1, S.A. de C.V. for the 90 MW phase 1 construction and operation of a 227 MW wind power park to be located in the State of Oaxaca, Mexico.
- Juancho Los Cocos Wind – Representation of Empresa Generadora de Electricidad Haina S.A., the largest power producer in the Dominican Republic, in negotiating an agreement with Cobra Gestión de Infraestructura, S.L.U. for the engineering, procurement and construction of a 25 MW wind power project to be located in Juancho Los Cocos, Dominican Republic. This was the first wind energy generating facility in the Dominican Republic.
- Bishop Hill I Wind Project – Representation of Bayerische Landesbank, Rabobank, and Banco Santander as mandated lead arrangers in connection with the financing for the 211 MW Bishop Hill I wind power project developed by Invenergy Wind LLC in Henry County, Illinois.
- FRV Austin Solar Project – Representation of Bayerische Landesbank as sole mandated lead arranger, agent and lender in connection with a US$59 million construction loan and a US$33 million Section 1603 cash grant bridge loan facility for a 30 MW alternating current/35 MW direct current ground-mounted photovoltaic solar power plant in Webberville, Texas.
- Post Rock Wind Farm – Representation of BayernLB, Rabobank, Nord/LB and Union Bank as mandated lead arrangers in connection with the project financing of the 201 MW Post Rock wind farm in Kansas. The financing included a US$293 million construction loan facility, a US$20 million letter of credit facility and a US$63 million term loan facility.
