Baker McKenzie advises on development and financing of Indonesia's first wind project
A cross-office Baker McKenzie team recently advised UPC Renewables and AC Energy Holdings (a subsidiary of Ayala Corporation) on the development and financing of the 75MW Sidrap wind farm project located in South Sulawesi, Indonesia.
This USD 150 million project is Indonesia's first utility-scale wind farm project to achieve financial close. The Sidrap project is being funded through equity provided by UPC Renewables and AC Energy Holdings, and project financing provided by the Overseas Private Investment Corporation, the US government’s development finance institution, and PT Bank Sumitomo Mitsui Indonesia, the Indonesian subsidiary of the Sumitomo Mitsui Banking Corporation of Japan.
UPC Renewables is a leading global energy player that develops, finances, constructs, owns and operates a portfolio of wind power generation assets. The company and its proponents have successfully developed and operated renewable energy projects in Italy, the USA, Canada, China and the Philippines. AC Energy is a wholly owned, energy-focused holding company of Ayala Corporation, with investments in solar, wind, hydro and conventional energy sources.
The Baker McKenzie team was led from Jakarta by Luke Devine, who heads the Firm's Asia Pacific Energy, Mining and Infrastructure practice, with support from Finance & Projects Partner Mita Guritno from Indonesian member firm Hadiputranto, Hadinoto & Partners, Banking & Finance Partner Mark Tibberts from the New York office, Finance & Projects Local Principal Erik Begin from Singapore member firm Baker McKenzie Wong & Leow, and Partner Barry Cheng and Associates Brian Lau and Ling Ling Ng from the Hong Kong office.
Brian Caffyn, CEO of UPC Renewables commented: “UPC has been the pioneer of wind power projects in Indonesia, with our Sidrap project being the first project-financed wind project in the country. We wanted a firm which was at the forefront of power sector development and financing in Indonesia, and that had good local relationship with the key government stakeholders. Baker McKenzie was the obvious choice. At its peak, the project development and financing work required legal input from counsel in Indonesia, Hong Kong, Singapore, New York and the Netherlands. To be able to have a single law firm to provide a seamless offering was a key part of moving to a successful financial close.”
Commenting on the deal, Luke Devine said: “We are delighted to have assisted our clients on this market-first environmentally and socially sustainable wind project. This deal plays to our strength in complex cross-border project finance transactions and the depth of our experience in power project financing in Indonesia and across the region. Indonesia continues to embrace the shift away from coal and diesel-fired power generation to instead exploiting its abundant renewable energy and gas resources. Baker McKenzie has played a leading role in developing new bankable contracting models for these new forms of power generation projects as they develop in Indonesia, having, in addition to the Sidrap wind farm, acted on a number of similar "market first" projects in the geothermal, hydro, gas and more recently solar space."