Indonesia: Linklaters advises on another major Chinese energy project as part of the “Belt and Road” initiative
Linklaters has advised China Development Bank Corporation on the project development and financing of the 2x1,050 megawatt Jawa 7 coal-fired power plant to be constructed in Banten Province, Indonesia. China Development Bank Corporation acted as lender and mandated lead arranger in connection with the provision of approximately US$1.3 billion in financing for the Jawa 7 project. The deal team included lawyers from Widyawan & Partners, Linklaters’ associated firm in Indonesia.
Xiaohui Ji, Beijing based Partner at Linklaters commented, “The project is another demonstration of Chinese outbound investment into projects of fundamental importance to economic and social development in the region.”
The investment aligns with China’s broader strategy as part of the Belt and Road initiative to support regional cooperation through economic development. Linklaters is deeply engaged in the Belt and Road initiative and has been advising on energy and infrastructure projects in a number of Belt and Road countries, including Cambodia, Indonesia, Kazakhstan, Myanmar, Pakistan, Russia, the United Arab Emirates, Vietnam, Georgia, Uzbekistan, Egypt and Iran.”
Jakarta-based David Holme, Partner at Linklaters and Senior Foreign Legal Adviser at Widyawan & Partners, said “The transaction demonstrates the strength of Linklaters’ expertise in complex and multi-jurisdictional transactions. The project is the largest Chinese-led power project to date in Indonesia and was awarded under the Indonesian Government's 35,000 megawatt power programme.”
Hong Kong-based Counsel for Linklaters, Andrew Compton, added “The project is a tangible demonstration of foreign investment delivering essential services to previously neglected regions. In a country where energy supply is inconsistent, the project provides a social and economic dividend through reliable energy supply. The transaction structure is also innovative as it did not involve either a business viability guarantee letter, or an Indonesia Infrastructure Guarantee Fund (IIGF) guarantee – both customary offtaker credit support features on recent Indonesian power projects – to enable funding.”
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- Linklaters is ranked band 1 in Projects and Infrastructure in China and Widyawan & Partners is ranked band 1 in Projects and Energy in Indonesia, both by Chambers Asia 2016.