Project Finance: Practical Case Studies

China and Nepal, and was the developer of, and a partner in, three merchant plants recently
constructed in the United States. Panda had developed 9,000 MW that were either under con-
struction or in commercial operation.
Panda typically uses nonrecourse financing at the project level and has drawn from a
variety of funding sources to finance its projects, including bank loans, multilateral and bilat-
eral agency loans, leveraged leases, and capital market transactions. The company has also
attracted substantial private equity capital for its merchant projects. In addition to TECO, it
has established partnerships and joint ventures with companies such as PSEG Global, FPL
Energy and Calpine Corporation.
Panda and TECO developed the two power plants on a 50/50 basis. Panda, as the original
developer, contributed the development assets to the partnership, and TECO provided all equi-
ty support during construction and long-term equity capital. The partnership will own the power
plants directly or indirectly, and will manage their development, construction and operation.

Partnership ownership structure

The partnership ownership structure is illustrated in Exhibit 13.1. The borrowers are two indi-
rectly but wholly owned special-purpose subsidiaries of the Partnership:

• Union Power Partners (UPP), formed to construct, own, operate and maintain the Union
  Power (El Dorado) project; and


• Panda Gila River (PGR), formed to construct, own, operate and maintain the Gila River
  Project.

PANDA ENERGY–TECO POWER JOINT VENTURE, UNITED STATES

Exhibit 13.1

Project ownership structure^2

Source: Offering Memorandum for Project Loans.

TPS GP TPS LP

TPS

Teco-Panda

Generating Co. LP

Panda

Panda GP Panda LP

Gila River

pipeline Panda Gila pipeline

Union Power

partners

Trans-Union

pipeline

50%

100% 100% 100% 100%

50%

Gila River project El Dorado project