ICBC contributes $60 million USD to the $425 million USD term loan tranche of a $528.9 million USD syndicated loan for the 700 MW Carroll County Energy Facility (CCEF) Project

Project narrative

On April 7, 2015, financial close was reached on a deal in which a syndicate of 10 banks — including the Industrial and Commercial Bank of China (ICBC) — entered into a $528.90 million USD senior syndicated secured loan agreement with Carroll County Energy, LLC — a Delaware-incorporated special purpose vehicle (SPV) jointly owned by Swiss privately-owned power plant developer Advanced Power AG (20% equity stake), Japanese electric utility Chubu Electric Power Co., Inc. (20% equity stake), American private investment firm Prudential Capital Group, L.P. (PCG) (20% equity stake), American labor-owned Ullico Inc. (20% equity stake), and Teachers Insurance and Annuity Association of America-College Retirement Equities Fund (TIAA-CRIEF) (20% equity stake) — for the 700 MW Carroll County Energy Facility (CCEF) Project. This loan was divided into three tranches: a $425.00 million USD term loan tranche, a $98.90 million USD letter of credit tranche, and a $5.00 million USD revolver tranche. The loan carried a maturity period of seven years and 11 months and a final maturity date of March 31, 2023. The $425 million USD term loan tranche and the $98.9 million USD letter of credit tranche carried an interest rate based on LIBOR plus an initial margin of 325 basis points (bps), which would increase twice by 25 bps each to 375 bps. The loan was secured (i.e. collateralized. ICBC contributed $60.00 million USD to the $425 million USD term loan tranche. In addition to ICBC, the following lenders contributed the respective amounts to the tranche: BNP Paribas S.A. ($44.99 million USD), Bank of America Merrill Lynch (BAML) ($60.00 million USD), CIT Bank, N.A. ($45.38 million USD), Crédit Agricole Corporate and Investment Bank (CACIB) ($36.41 million USD), Deutsche Bank AG ($45.38 million USD), ING Capital LLC ($45.38 million USD), Mizuho Bank ($12.08 million USD), Siemens Financial Services GmbH ($30.00 million USD), and SunTrust Robinson Humphrey, Inc. (STRH) ($45.38 million USD). The $98.9 million USD letter of credit tranche was provided by BNP Paribas ($13.40 million USD), BAML ($4.00 million USD), CACIB ($25.90 million USD), and Mizuho ($55.60 million USD). BAML and Mizuho each provided $2.5 million USD to the $5 million USD revolver tranche BNP Paribas served as Left Lead Arranger and Administrative Agent. CACIB served Right Lead Arranger, Syndication Agent, and Hedge Coordinator. BNP Paribas, CACIB, BAML, CIT, Deutsche Bank, ICBC, ING, Mizuho, SFS, and SRTH served as Coordinating Lead Arrangers and Joint Bookrunners. The proceeds were used by the borrower to finance the development of the Carroll County Energy Facility, a 700 MW combined-cycle natural gas-fired electric generating facility located on a 77 acre site located in Washington Township one-half mile east of Ohio 9 and 2.5 miles north of Carrollton, Carroll County, Ohio. The plant was located proximate to the Utica and Marcellus natural gas production and AEP's 345 kV transmission lines and Kinder Morgan's Tennessee Gas Pipeline system. The plant consisted of two General Electric (GE) 7F.05 gas turbines, which contain a heat recovery steam generator (HRSG) and would be equipped with OpFlex Advanced model-based control technology, and a D602 steam turbine GE’s patented Rapid Response combined cycle system and included advanced emissions control technology, reportedly making it one of the cleanest and efficient plants in the United States. The project was expected to operate in accordance with the National Ambient Air Quality Standards, producing half the carbon dioxide and 90% less sulphur dioxide and nitrogen dioxide compared with a conventional coal-fired power plant. The project was expected to provide enough electricity to power approximately 750,000 homes. The project was expected to create 700 construction jobs during peak construction and 20 to 30 permanent jobs during operation. The project had a cost of approximately $939.9 million USD, with $411 million USD in equity from the sponsors. Bechtel Corporation was the turnkey engineering, procurement, construction (EPC) and commissioning contractor. Advanced Power AG was the construction and asset manager. EthosEnergy would operate the facility once operational. General Electric provided its turbines for the project. CESO Inc provided civil engineering, surveying, pipeline route development, permitting, and traffic services. John Cockerill supplied steam boilers for the project. In April 2014, Advanced Power AG filed a letter of notification with the Ohio Power Siting Board for permission to construct a 345 kV electrical interconnection for the plant. Commercial operations were scheduled to occur in 2017. Construction began on July 21, 2015. The project went into commercial operation in mid-December 2017. ICBC's involvement in financing the Carroll County Energy Project became the source of local controversy. In August 2019, a group called Ohioans for Energy Security began a $1 million USD television and radio ad campaign with a 60-second spot featuring images of Chinese President Xi Jinping and Chinese officials in suits claiming that China was interfering with the American economy and the Ohio electric grid with narration telling viewers to not sign a petition supporting a referendum on House Bill 6, which was signed into Ohio state law in 2019 providing a $150 million USD per year subsidy for nuclear energy in Ohio beginning in 2021 to help prevent the closure of the two nuclear energy stations in the state. The bill was opposed by many environmental, businesses, and industry groups, including the natural gas companies. ICBC had contributed to syndicated loans for the Oregon Clean Energy Center, the Carroll County Energy facility, and the Lordstown Energy Center. This allowed supporters of House Bill 6, such as the nuclear energy industry, to claim that the Chinese government was attempting to take control of Ohio's natural-gas fired plants, even though lending does not mean control (and ICBC was in a syndicate for those loans with other foreign banks) and the federal government via the Committee on Foreign Investment in the United States had the ability to prevent projects from proceeding if foreign investment posed national security risks (the owners of the nuclear plants in Ohio, FirstEnergy, had previously received ICBC loans from it. Ohioans for Energy Security claimed that China was attempting to steal Ohio jobs, take over the electric grid and other energy infrastructure, and meddled in Ohio elections. Analysts noted that while the grounds of the argument were illogical, the campaign tried to connect local energy issues to the national issues raised by President Donald Trump, who had won Ohio in 2016. The referendum missed its deadline to go on bailout and House Bill 6 went into effect in October 2019. Later in March 2021, House Bill 128 was passed that partially repealed House Bill 6. On February 15, 2019, a syndicate of three banks entered into a $526.5 million USD syndicated loan agreement with Carroll County Energy, LLC; the proceeds were used by the borrower to refinance the 2015 project debt.