Chapter 1

Laibin B, China

Type of project

2 x 350 MW, coal-fired power plant.

Country

People’s Republic of China (PRC).

Distinctive features

• First project in China open to international bidding.


• First Chinese infrastructure project financed entirely with foreign capital.


• First Chinese infrastructure project to be developed by a wholly foreign-owned pro-
  ject company under a BOT framework.


• First BOT project to be formally approved at the state level by the State Planning
  Commission (SPC).^1


• Documentation serves as a model for future BOT power projects in China.


• French ECA Coface took project risk for only second time in its history.

Description of financing

The The US$616 million project cost was financed in 1997 with US$154 million equi-

ty from the project sponsors and US$462 million in debt facilities. These debt facili-

ties consisted of:

• US$303 million commercial bank loan backed by Coface at 135 basis points (bps)
  over the London interbank offered rate (Libor) pre-completion and 75 bps over
  Libor post-completion, with participation fees of 45 bps for lead managers taking
  US$35 million or more and 30 bps for managers taking from US$25 million to
  US$34.9 million;


• US$159 million uncovered commercial bank tranche, with fees of 80 bps for lead
  managers lending US$35 million or more and 65 bps for managers committing
  US$25 million to US$34 million; and


• US$100 million standby financing consisting of US$60 million equity commitment
  from sponsors and US$40 million debt commitment from commercial banks.