Allen & Overy has advised Xe-Pian Xe-Namnoy Power Company Limited and its sponsors in connection with the USD1.02 billion 410MW Xe-Pian and Xe-Namnoy cross-border hydropower project located in the Lao People’s Democratic Republic. This is the first significant investment by Korean sponsors in this sector.

The project, which achieved financial close on 5 February 2014, is a joint venture between the Lao government and a consortium of private-sector sponsors. It will take approximately five years to complete and is scheduled to start commercial operations in 2019.

Allen & Overy advised the sponsors, a group comprising SK Engineering & Construction Co., Ltd., Korea Western Power Co., Ltd., Ratchaburi Electricity Generating Holding Public Company Limited and Lao Holding State Enterprise, on all aspects of the development, financing and construction of the project.

Commenting, Allen & Overy partner Stephen Jaggs said:  “It is pleasing to have been able to work with Korean sponsors on their first major investment in the Lao hydropower sector and with Ratchaburi Electricity Generating Holding Public Company Limited on this important project for Thailand. Under the offtake arrangements, 90 percent of the generating capacity of the project will be distributed to the Electricity Generating Authority of Thailand under a 27-year power purchase agreement, the remainder will feed into the Lao electricity grid. Also of note is that the project financing, consisting of a syndicated multi-tranche and multi-currency debt structure, is fully financed by Thai banks which demonstrates continuing strong support from Thai financial institutions for regional power projects”.

Stephen Jaggs led the Allen & Overy team from Bangkok with support from lawyers Anchalee Limviriyalers, Chris Bishop, Sadi Tanmanatragul, Sarah Wilson, Vorasaree Wangwittiya, Adam Reekie, Matthew Del Rosso, Wipawat Yingsakmongkol and Monsicha Pongrujikorn.  Charlie Grover (Counsel) in Singapore provided support on the construction and operation arrangements with assistance from Kyle Sanderson and Matt Chow.

Krung Thai Bank Public Company Limited acted as lead arranger.  The lender group includes Bank of Ayudhya Public Company Limited, Export-Import Bank of Thailand, Krung Thai Bank Public Company Limited and Thanachart Bank Public Company Limited.

Other law firms advising on the project include Chandler and Thong-Ek Law Offices Limited as lenders’ Thai counsel; DFDL (in Laos) as Lao local counsel to both sponsors and lenders (two separate teams); Latham & Watkins as lenders’ deal counsel; and Shin & Kim as sponsors’ Korean counsel.