[IPP] Chinese banks pledge a $399.5 million USD syndicated loan for the 250 MW NBT/Malakoff Wind Project in Pakistan

In 2013, the Industrial and Commercial Bank of China (ICBC), China Development Bank (CDB), and Bank of China (BOC) pledged a $399,500,000 USD syndicated loan to NBT Wind Power Pakistan II (Private) Limited for the 250 MW NBT/Malakoff Wind Project in Pakistan. The terms of the loan pledge — memorialized in a non-binding term sheet — were as follows: a maturity period of 15 years, a grace period of 2.5 years, an interest rate of 6-month LIBOR plus a 4.9% margin, a management fee of 2%, and a commitment fee of 1.5%. The Export-Import Bank of Malaysia Berhad also reportedly pledged funds for the project, and Sinosure was also reportedly involved. Harbin Electric International Company Limited was the EPC contractor for the project. NBT Wind Power Pakistan II (Private) Limited (NBTWPPPL-II) was a project company and special purpose vehicle owned by Malakoff International Limited — a company incorporated in Cayman Islands (a wholly-owned subsidiary of Malakoff Corporation Berhad, Malaysia) — and NBT AS, a Norwegian company organized under the laws of Norway. NBT AS owned 40% equity stake in NBTWPPPL-II, while Malakoff International Limited owned a 60% ownership stake.

Additional details

The average 6-month LIBOR rate in 2013 was 0.409%. Therefore, the interest rate was coded as 0.409% + 4.9%, or 5.309%. According to multiple, official sources, the Government of Pakistan has issued sovereign guarantees in support of all loans issued by Chinese state-owned banks for independent power projects (IPPs) in Pakistan (see https://www.fmprc.gov.cn/ce/cepk/chn/zbgx/t1735166.htm and http://pk.chineseembassy.org/eng/zbgx/202110/t20211010_9558510.htm and https://www.dropbox.com/s/bmx3w2b38o7guxm/Debt%20Pricing%20of%20IPPs%20%28002%29.pdf?dl=0). As such, AidData assumes that the loan captured in this record is backed by a sovereign guarantee from the Government of Pakistan.

Number of official sources

5

Number of total sources

6