DFDL advises on USD 1.02 billion Lao-Thai Hydropower Project Xe-Pian Xe-Namnoy
DFDL has advised the lenders and sponsors of the Xe-Pian Xe-Namnoy joint venture project located 500 km south-east of the capital Vientiane, Lao PDR. The USD 1.02 billion 410MW Xe-Pian and Xe-Namnoy cross-border hydropower project is the first major investment by Korean sponsors in the Lao energy sector.
The financing documents of the project were signed on 28 November 2013, and the multi-currency financing project closed 5 February 2014. Commercial operations are scheduled to start in 2019 and about 90% of the project’s capacity will be sold to the Electricity Generating Authority of Thailand (EGAT) with the remainder to be sold to Electricité du Laos (EDL) under long-term power purchase agreements.
DFDL acted as Lao Local Counsel for both lenders and sponsors under an ethical wall arrangement. The sponsors’ group comprises SK Engineering Construction Co., Ltd., Korea Western Power Co., Ltd., Ratchaburi Electricity Generating Holding Public Company Limited and Lao Holding State Enterprise. In addition to Krung Thai Bank Public Company Limited as lead arranger, the lender group includes Bank of Ayudhya Public Company Limited, Export-Import Bank of Thailand, and Thanachart Bank Public Company Limited.
DFDL’s primary role was to advise sponsors and the project company in relation to Lao local law aspects of the project development, including regulatory requirements, tax regime, project documentation and financing documents (including negotiation of the Lao security documents), and closing assistance.
DFDL acted also as Lao local counsel to the lenders. In that respect, representation included due diligence, drafting and negotiation of Lao security documents, reviewing financing documents, advice on special Lao issues, advice on account structure, and providing closing assistance.
Bangkok partners David Doran and Audray Souche co-led the lenders team, comprising Duangkamol Ingkapattanakul (Lao PDR / Thailand), Roy Lee (Thailand) and Senesakoune Sihanouvong (Lao PDR).
Partner Martin Desautels and Senior Counsel Walter Heiser co-led the sponsors’ team comprising Kristy Newby (Lao PDR) and Walanchathas Sanguangwong (Lao PDR).
Other law firms involved in the hydropower project include Allen Overy (sponsors’ project counsel), Latham & Watkins (lenders’ international counsel), Shin Kim (sponsors’ Korean counsel), and Chandler and Thong-ek Law Offices Limited (lenders’ Thai counsel).
“Our lead role in acting for both lenders and sponsors on this landmark transaction further reinforces DFDL’s market-leading position in advising on hydro power projects in Asia,” says David Doran. “As we are currently advising on seven other active hydropower projects in Laos, we were able to bring our very up to date experience and insights on legal and government issues and negotiating positions to this transaction to the benefit of our clients on both sides. For some of these other active projects, we act both as project counsel and Lao counsel. As more and more global investors from around the world look for opportunities in this type of project in Southeast Asia, we are well placed to capture more leading mandates like this.”
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