Asia awards: Project finance

Author: | Published: 9 Mar 2010
L-R: Alan Schiffman, Skadden, Andrew Lam of Latham & Watkins and Stephen Bottomley, Mayer Brown JSM

Deals of the year

WINNER: Paiton 3
The $1.4 billion Paiton 3 project in Indonesia used a challenging financing structure to fund a new project constructed within an existing project complex. The new IPP (independent power plant) will share some of the existing project’s facilities but has been financed by separate lenders.

The financing for the new project has been structured using the vehicle that financed the existing plant. As such, the cash flows and security arrangements had to be structured to give lenders access to their project, rather than both.

Complex agreements were required to stipulate what will happen if either project gets into distress, as well as the use of shared facilities. The terms of the contracts had to be agreed between the borrower and the new lenders, as well as...