Linklaters advises on the structuring and financing of the first IPP project in Mali
Linklaters has advised a consortium of sponsors on the structuring and financing of the first IPP project in Mali with a total project cost of €123m.
The project consists of the construction, installation and operation of a thermal power plant with an installed capacity of 90.24 MW in Kayes, Mali.
This major project, supported by the Republic of Mali illustrates both the progressive restoration of peace since the war against terrorism which occurred in 2012, and the significant efforts made by international financial institutions and the Malian authorities in order to foster the economic development of Mali through the implementation of energy and infrastructure projects.
The main finance documents were executed on 6 March 2017 and the financial close took place on 12 June 2017.
The consortium of sponsors was composed of a Danish institutional investor (The Investment Fund for Developing Countries), a Danish construction company (Burmeister & Wain Scandinavian Contractor a/s), a South African investment fund affiliated with the South African insurance group Old Mutual (AIIM Seed Partnership) and a Mauritius holding company (Redox Power Solutions Limited) which was formed by the initiators of the project (including Mr. Koenraad Beckers and Mr. Amadou Sow).
The debt amounted to nearly €90m and was arranged by the West African Development Bank (WADB) and granted by a pool of international financial institutions comprising WADB, the Islamic Development Bank (IDB), the OPEC Fund for International Development (OFID), the Islamic Corporation for the Development of the Private Sector (ICD) and the Emerging Africa Infrastructure Fund (EAIF).
The financing included both a conventional tranche and an Islamic tranche in the form of an Ijara. This is one of the first financings of its kind in Africa to be governed by French law.
In addition, a partial credit guarantee was issued by Guarantco (an entity which is part of the Private Infrastructure Development Group sponsored by the United Kingdom, Switzerland, Sweden, the Netherlands and Australia) in order to secure the payment obligations of the project company in connection with the debt service reserve account.
Finally, the International Bank for Mali (Banque Internationale pour le Mali), part of the Attijariwafa Bank Group, also granted a working capital facility the purpose of which is to partially finance the project company’s working capital needs.
Mr. Koenraad Beckers (Chief Executive of the project company Albatros Energy Mali SA) noted that "The development of the first IPP in an emerging country is quite a challenge by itself. It becomes even more complex when the senior debt is composed of a combination of traditional and Islamic financing and the legal framework demands the integration of the local OHADA rules with international law. Hence the vital importance of partnering with a highly competent, experienced and creative legal advisor."
"Linklaters’ in-depth knowledge of the West-African legal framework, their experience and capabilities with structuring of Islamic and conventional financing, their solution-oriented approach during the negotiation of the key-project documents (PPA, EPC, O&M, Direct Agreement, etc.) and the exceptional accessibility of their bilingual, diverse team of IPP experts have been paramount to help us bring this deal to its financial close."
The international team set up for the purpose of this project was led by Paul Lignières (Partner) and Mark Barges (Counsel) from the Project Finance department of the Paris office. They were assisted by Aurélia Parra (Managing Associate), Ghita Bennis (Associate), Cédric Sinarinzi (Associate), Nathanaël Caillard (Associate) and Binta Barry (Associate).
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