[IPP] CDB provides a $107.7 million loan for 49.5 MW Three Gorges First Wind Farm Project

In 2013, China Development Bank (CDB) provided a $107,798,767 million loan to Three Gorges First Wind Farm Pakistan (PVT) Limited for a 49.5 MW Wind Farm Project. Three Gorges First Wind Farm Pakistan (PVT) Limited is a project company (special purpose vehicle) and subsidiary of China Three Gorges South Asia Investment Ltd. (CSAIL) created for the purpose of financing, designing, implementing a maintaining a 49.5MW wind farm in Jhampir, near Nooriabad in Thatta District and Sindh Province. The project involved the supply and installation of 33 Goldwind wind turbines. The project was implemented on a Build-Own-Operate (BOO) basis. The total project cost was $134,748,459 and it was financed with with 80% debt and 20% equity. Based on the the nature of debt financing details provided by Three Gorges First Wind Farm Pakistan (PVT) Limited in its tariff petition to Pakistan’s National Electric Power Regulatory Authority (NEPRA), the estimated face value of CDB’s term loan facility is $107,798,767 and the estimated terms of the loan are as follows: 10 year maturity, 1 year grace period, and an interest rate of 6-month LIBOR (0.3268%) plus a 4.5% margin (or 4.83%). Sinosure also provided insurance for the loan. The estimated value of the Sinosure fee is 6.5% of the face value of the term loan facility. China International Water and Electric Corporation was the onshore EPC contractor and China Huashui Hydropower Development Corporation was the offshore EPC contractor. The project commenced on or around January 4, 2012. It reached its commercial operations date (COD) on November 25, 2014. The wind farm is reportedly fulfilling the electricity needs of around 60,000 households.

Additional details

1. 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

8

Number of total sources

13