Leading global law firm Baker McKenzie has advised Suez, ITOCHU Corporation and Marguerite as the successful sponsors and their joint venture company Beo Čista Energija on the EUR 290 million project financing of the 25-year PPP (Public-Private-Partnership) to develop a new system to treat the municipal waste of the City of Belgrade.
The project is the largest PPP ever signed in Serbia and will close one of the largest uncontained landfills still active in Europe. This is a national and local priority since it will contribute to Serbia meeting targets in the area of waste management and environmental protection to help with its EU accession negotiations. The scheme will involve the remediation of the municipal waste landfill and the financing, construction, and long-term operation of modern waste management facilities for the Serbian capital. Planned infrastructure includes the construction of a 103 MW energy-from-waste facility, processing up to 43 tons of waste per hour, delivering power to the national grid and heat to Belgrade’s municipal district heating company Beogradske Elektrane, thus reducing its dependency on natural gas. Additional facilities include the construction of a waste recycling unit with a capacity of 200,000 tons per year of demolition waste and an engineered landfill with biogas recovery.
Beo Čista Energija will benefit from 12-year guaranteed feed-in tariffs for the sale of electricity produced by the energy-from-waste facility and the landfill gas recovery plant – a premiere for a waste project in Serbia.
The Baker McKenzie team acted as lead international counsel to the sponsors and Beo Čista Energija from the bidding stage through to financial close, including advising on the competitive dialogue process with the City of Belgrade, EPC, O&M and other project sub-contracts, Heat Offtake, Power Offtake and PPP Agreements.
Since commercial close of the project in September 2017, Baker McKenzie has been advising on the multi-source financing of the Project, with non-recourse credit facility by a Lender group which includes the IFC, the EBRD and OeEB. The Project is also supported by equity bridge financing arrangements and will benefit from a series of MIGA equity guarantees.
Serbian law advice was provided to the sponsors and Beo Čista Energija by Wolf Theiss. The Wolf Theiss team was led by partner Miroslav Stojanovic, working with counsel Andjelka Todorovic and senior associate Milos Andjelkovic.
Marc Fèvre, partner in the Energy, Mining & Infrastructure practice at Baker McKenzie commented on the deal, “We congratulate Suez, ITOCHU Corporation, Marguerite and Beo Čista Energija on achieving financial close and are delighted to have been able to work with this group of key clients for whom we act internationally. The project will provide substantial benefits to the citizens of the City of Belgrade and is the first its kind in the region. It illustrates our specialism in first-in-kind, complex infrastructure projects as well as our expertise in energy and environmental infrastructure and multi-source project financings. We are particularly pleased to have helped close the transaction on a remote basis amid the restraints of the current COVID-19 crisis.”
The Baker McKenzie team for the project financing phase was led from London by partner Marc Fèvre and included senior associates Chantel van Zyl and Luka Lightfoot, and associates Saskia Volhard, Andrew Hope and Lesley-Anne Wilson. In the commercial phase, the team was co-led by partner Mike Webster and also included Senior Associate Rhiannon Williams. The core team was supported by Baker McKenzie's offices in Paris (led by Partner Gonzague Basso), Luxembourg (led by Partner Jean-François Trapp) and Tokyo (led by Partner Shinichiro Kitamura and Senior Associate Junya Suzuki) and by Baker McKenzie's Project Management Team.
The deal has recently been recognised at the International Financial Law Review Awards for Europe as the Project Finance Deal of the Year, where it was described as one of the most significant waste-to-energy projects in Europe, establishing a useful template for other pathfinder projects.