Simmons & Simmons has advised Oslo-based NBT, a Norwegian wind power developer and the largest foreign investor in Ukraine, by leading the negotiations on the Engineering, Procurement and Construction (“EPC”) contracts with China Electric Power Equipment and Technology Co, Ltd. (“CET”) for the 300 MW second stage and 450 MW third stage of the Zophia Wind Park in Ukraine (“Zophia II” and “Zophia III” respectively).
Once completed, together with the 42.5 MW first stage, the Zophia Wind Park will become the largest onshore wind farm in Europe, with a total capacity of 792.5 MW – and will generate enough electricity to power the needs of approximately 340,000 households.
Simmons also advised NBT on its Preliminary Financing Arrangement Agreement, under which NBT and CET set out their intentions for financing for Zophia II and Zophia III. NBT plans to tap Chinese banks including Industrial Commercial Bank of China (“ICBC”), the Export-Import Bank of China (“Exim Bank of China”) and China Construction Bank (“CCB”) for €500 million of senior debt and arrange an additional €250 million from international banks. This promises to be a landmark Belt and Road project in respect of its combined international and Chinese financing.
The Simmons team was led by projects partner Alex Blomfield and assisted by associates Louise Mackenzie and Elizabeth Ormesher.
Joar Viken, CEO of NBT, said “Alex has been instrumental in all of NBT’s EPC negotiations in Ukraine, both for the Syvash and the Zophia projects. His outstanding work ethic, combined with his commercial savviness and ability to provide creative solutions to complex problems, have been instrumental in closing these EPC contracts. His vast knowledge regarding international project financing has been advantageous in ensuring we negotiate a bankable product. In addition, we are deeply impressed by Simmons and the assistance the supporting staff has been providing throughout the process.”
Commenting on the transaction, Alex Blomfield said: “It is a privilege to advise NBT on such a complex and important deal. NBT is an excellent developer and one of only a handful of sponsors that successfully can combine trusted relationships in China with international financing. Having recently joined Simmons, it is great to be a part of a firm which is so well placed to support companies such as NBT but also other clients on major projects of similar scale and size.”
With a focus on emerging markets, NBT was the first company to close a limited-recourse financing in the fledgling wind power market in China in 2010 and earlier this year NBT, together with its equity partner Total Eren, closed the first limited-recourse financing of a wind farm in Ukraine with the 245.7 MW Syvash project. So far, NBT has commissioned three wind farms, totalling 150 MW of capacity in China. Leveraging the success in China and Ukraine, NBT is continuously assessing project opportunities in other emerging markets.
The Zophia deal is the latest in a line of award-winning wind project deals for the Energy, Natural Resources & Infrastructure Projects team at Simmons, demonstrating its market leading position in landmark transactions such as the Markbygden 650 MW wind farm in Sweden which won European Wind Deal of the Year at Thomson Reuters PFI Europe Awards 2018 and advising on the largest joint venture arrangement between a private equity fund and a developer in Africa (US$1.9bn ) and Chile (US$1.4bn).
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