The Gansu Guazhou Ganhekou Wind Farm project financing in
western China is the first foreign loan registered at the local
State Administration of Foreign Exchange (Safe).
The deal illustrates that in some China deals, gaps in
traditional risk allocation can be smoothed over by government
and regulatory support.
The registration was conducted locally. So the parties had
to register with a local branch of Safe in Jiuquan, in the
The parties had to file a complicated project financing
structure with an embedded interest rate hedge into a Safe
location – which itself was registering a foreign debt
for the first time. "This was one of the key challenges in the
deal," said Roger Lui, lead partner at Allen & Overy, who
advised International Finance Corporation (IFC).
A loan of $140 million was extended to the project...