ICBC contributes $800 million to $1 billion syndicated bridge loan for 1710 MW São Simão Hydropower Station Acquisition Project

On September 27, 2017, China State Power Investment Corporation (SPIC) acquired the São Simão Hydropower Plant (HPP) from Companhia Energetica de Minas Gerais (a Brazilian state-owned company) for $2.25 billion (R$ 7.18 billion). Then, on November 10, 2017, SPIC Brazil Sao Simao Hydropower Energy Co., Ltd. (a project company) signed the 30-year concession agreement with the Brazilian Electricity Regulatory Authority. On November 28, 2017, SPIC submitted payment for the franchise fee. Then, in February 2018, ICBC and JPMorgan Chase Bank, N.A. into a $1 billion syndicated loan agreement with UHE São Simão Energia S.A. -- a special purpose vehicle and wholly-owned subsidiary of China State Power Investment Corporation (SPIC)-- for the 1710 MW São Simão Hydropower Station Acquisition Project. ICBC acted as Mandated Lead Arranger and JP Morgan Chase Bank, N.A. acted as Agent. The loan carried a 1-year maturity and an unknown interest rate. The borrower was expected to use the proceeds of the loan to finance the acquisition of the 30-year franchise (or concession rights) over 1710 MW São Simão Hydropower Station in Brazil. More specifically, the proceeds of the loan were used to cover the transaction costs, fees, and taxes related to the acquisition and rights to use 1710 MW São Simão Hydropower Station. SPIC formally took over Sao Simao Hydropower Station in Brazil on May 10, 2019.

Additional details

1. This project is also known as the SPIC’s Bidding of 30-year Concession Right of Sao Simao HPP in Brazil. The Chinese project title is 圣西芒水电站 or 国家电力投资集团公司竞标巴西圣西芒水电站30年特许经营权项目. The Portuguese project title is Usina Hidrelétrica de São Simão or UHE São Simão. 2. The power plant is also called the São Simão Dam or São Simão Hydropower Station or São Simão HPP or HPP São Simão. 3. The Brazilian Central Bank records a $800 million loan between ICBC and UHE São Simão Energia S.A. in 2018 (Registration ID TA814332). This is assumed to be the same transaction. 4. This deal won the APAC CEO Award of JPMorgan in 2018. 5. GE Renewable Energy’s Hydro division signed a contract in March 2022 with SPIC Brasil to lead the modernization project of the 1,710 MW São Simão Hydroelectric Power Plant’s generating units and auxiliary services. Located in Minas Gerais and Goiás, between the municipalities of Santa Vitória and São Simão, the plant has six turbine-generator units. The dam is 3,500 meters long and has a maximum height of 127 meters. The project was inaugurated in 1978. The scope includes the supply of equipment for the turbines, generators and auxiliary systems, besides the engineering project and integration, assembly and commissioning of the six generating units. In addition, the project will be supported by Powerchina, which is part of the consortium led by GE to execute the project. Powerchina is responsible for the supply of electrical and mechanical balance of plant systems, the digital control system and hydromechanics. Execution of the project is expected to be completed in nine years. The stages of component acquisition and equipment manufacturing will take place at GE Renewable Energy’s unit in Taubaté, Sao Paulo, Brazil, and in partnership with other suppliers. The final phase of the project, which will be carried out by GE Renewable Energy, includes the assembly, installation and testing of the equipment.

Number of official sources

9

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20