Chapter 2

Meizhou Wan, China

Type of project

724 MW (net) pulverised-coal-fired power plant with two 362 MW units.

Country

People’s Republic of China (PRC).

Distinctive features

• First wholly foreign-owned power project successfully financed outside China’s
  state-sponsored build-own-transfer (BOT) programme.


• Second entirely foreign-owned project in China.


• Lack of implied central government support.


• Multilateral agency both provides cover and holds equity stake.
  •Two export credit agencies (ECAs) involved.


• Financed during depth of Asian currency crisis.
  •Tariff protocol and project documentation serve as models for other power projects
  in China.


• Power Purchase Agreement (PPA) terms repudiated by provincial government.

Description of financing

The US$725 million project cost was financed in 1998 by US$158 million in equity con-

tribution from sponsors and US$567 million in debt financing, the latter comprising:

• US$40 million as a 16-year Asian Development Bank (ADB) direct loan;


• US$150 million as a 12-year ADB complementary loan at 195 basis points (bps)
  over the London interbank offered rate (Libor);


• US$53 million as a 16-year Compagnie Française d’Assurance pour le Commerce
  Extérieur (Coface) facility at 150 bps over Libor pre-completion and 75 bps over
  Libor post-completion;


• US$76 million as a 16-year Compania Española de Seguros de Credito a la
  Exportación (Cesce) facility at 125 bps over Libor;


• US$218 million as a 12-year uncovered commercial loan at 210 bps over Libor; and


• US$38 million as a 10-year working capital facility at 210 bps over Libor.