Simmons & Simmons has advised Oslo-based NBT, a Norwegian wind power developer and the largest foreign investor in Ukraine, by leading the negotiations on the Engineering, Procurement and Construction (EPC) contracts with China Electric Power Equipment and Technology Co, Ltd. (CET) for the 300MW second stage and 450MW third stage of the Zophia Wind Park in Ukraine (Zophia II and Zophia III respectively).
Once completed, together with the 42.5MW first stage, the Zophia Wind Park will become the largest onshore wind farm in Europe, with a total capacity of 792.5MW – and will generate enough electricity to power the needs of approximately 340,000 households.
Simmons also advised NBT on its Preliminary Financing Arrangement Agreement, under which NBT and CET set out their intentions for financing for Zophia II and Zophia III. NBT plans to tap Chinese banks including Industrial Commercial Bank of China (ICBC), the Export-Import Bank of China (Exim Bank of China) and China Construction Bank (CCB) for 500 million euros (US$557.77 million) of senior debt and arrange an additional 250 million euros from international banks. This is set to be a landmark Belt and Road project with respect to its combined international and Chinese financing.
The Simmons team was led by projects partner Alex Blomfield and assisted by associates Louise Mackenzie and Elizabeth Ormesher.
Commenting on the transaction, Blomfield says, “It is a privilege to advise NBT on such a complex and important deal. NBT is an excellent developer and one of only a handful of sponsors that successfully can combine trusted relationships in China with international financing.”
With a focus on emerging markets, NBT was the first company to close a limited-recourse financing in the fledgling wind power market in China in 2010 and earlier this year NBT, together with its equity partner Total Eren, closed the first limited-recourse financing of a wind farm in Ukraine with the 245.7MW Syvash project.
So far, NBT has commissioned three wind farms, totalling 150 MW of capacity in China. Leveraging the success in China and Ukraine, NBT is continuously assessing project opportunities in other emerging markets.
The Zophia deal is the latest in a line of wind project deals for the Energy, Natural Resources & Infrastructure Projects team at Simmons, demonstrating its position in landmark transactions such as the Markbygden 650MW wind farm in Sweden which won European Wind Deal of the Year at Thomson Reuters PFI Europe Awards 2018 and advising on the largest joint venture arrangement between a private equity fund and a developer in Africa (US$1.9 billion) and Chile (US$1.4 billion).