The syndicated loan is the first green loan in Vietnam to be certified by the Climate Bonds Initiative.
Baker McKenzie's Bangkok office has acted as Thai law counsel to B.Grimm Power Public Company Limited (as major sponsor) and Truong Thanh Viet Nam Group Joint Stock Company (as local sponsor) in relation to the project financing of a 257 megawatt solar power plant in Phu Yen Province, Vietnam. The power plant is the largest ground-mounted solar power project under a single power purchase agreement entered into between a project company and Electricity of Vietnam.
The financing comprises a USD 27.9 million loan funded by Asian Development Bank (ADB), a USD 148.8 million syndicated loan (B loan) funded by commercial banks with ADB as lender of record, and a USD 9.3 million loan from Leading Asia’s Private Infrastructure Fund (LEAP), to which the Japan International Cooperation Agency had made a contribution. Participating commercial banks include Bangkok Bank Public Company Limited, KASIKORNBANK Public Company Limited, Kiatnakin Bank Public Company Limited, Standard Chartered Bank, and Industrial and Commercial Bank of China Limited.
The loan, which will fund the development and operation of the power plant, is among the first group of large-scale Vietnam solar power projects funded by ADB under the sub-participation arrangements and the FiT rate of USD 9.35 cents per kWh.
B.Grimm Power is one of Thailand’s largest private power producers with a total capacity of 2.9 gigawatts, including 24 solar farms. Truong Thanh Viet Nam Group Joint Stock Company ("TTVN") is involved in clean energy investment in Vietnam and has an equity interest in three operating solar farms with a total capacity of 357 MW. TTVN is also implementing wind and rooftop solar projects.
The Baker McKenzie team was led by Vit Vatanayothin, the renewable energy partner in the Bangkok office, with the support of Senior Associate Napas Na Pombejra and Sujade Simthamnimit, Associates Sawaporn Sophanodora and Tatcha Thumpramoth.
"We are very pleased to have been able to draw on our strong cross-border renewable and project financing capabilities and work in close collaboration with our client and the Vietnamese legal counsel in overcoming the many unprecedented Vietnamese legal issues that Vietnamese project companies will encounter in financing renewable projects, among them, bankability of a power purchase agreement, refinancing of EPC deferred payments, the opening and maintenance of offshore accounts, various approvals and registrations with local authorities " Vit said. "As Thai and international companies increasingly look to Vietnam for opportunities in renewable energy, we believe the successful closing of this deal will help set the precedent and market practice for subsequent solar project financing transactions in Vietnam."