Narrative
Full Description
Project narrative
On June 22, 2020, Bank of China Limited (Hungarian Branch) and Bank of China (Central and Eastern Europe) Limited signed a EUR 75 million facility (loan) agreement with Dunántúli Naperőmű Energia Zrt. and Dunántúli Megújuló Energia Zrt. — special purpose vehicles (SPVs) and wholly-owned subsidiaries of China National Machinery Import & Export Corporation (CMC) — for the 100MW Kaposvár Solar Power Plant Construction Project. The loan had two equally-sized tranches and a maturity of 15 years. Bank of China acted as mandated lead arranger as well as facility and security agent. The EUR 100 million independent power project (IPP) was financed according to a debt-to-equity ratio of 75:25. The purpose of the project was to construct two 49.28 MW photovoltaic power plants in Kaposvár, a city in southwestern Hungary, and thereby provide electricity to 50,000 nearby residents. The project was also expected to generate 200 local jobs and eliminate 120,000 tons of carbon dioxide emissions. China National Machinery Import & Export Corporation (CMC) was the EPC contractor responsible for project implementation. Construction began on or around June 22, 2020 and the solar power plants were put into operation on May 27, 2021. It is was originally envisaged that the project would reach its commercial operations date (COD) in February 2021.
Staff comments
1. This project is also known as the Kaposvár Solar PV Project, the Kaposvár PV Project, the Kaposvar 49.28 x 2 MW PV Power Station Project, and the 100MW Napelem Park Project. The Chinese project title is 匈牙利考波什堡光伏电站项目. 2. London-based international law firm Ashurst acted as English counsel to Bank of China on the transaction. 3. Bank of China acted as mandated lead arranger as well as facility and security agent. AidData has coded this transaction as a collateralized loan because Bank of China served as the security agent (i.e. collateral agent) for the loan. When lenders take collateral as security for their loans, a collateral/security agent is often appointed to enforce rights against the collateral in the event of the borrower's default under the loan. 4. It appears that the loan supported two separate borrowers (SPVs) because the project supported two separate 49.28 MW photovoltaic power plants in Kaposvár. However, this issue requires further investigation. 5. CMC’s equity contribution to the project is captured via Record ID#87177. 6. Bank of China (Central and Eastern Europe) Limited is also known as Bank of China (CEE) Ltd. It is a subsidiary of Bank of China (Europe) S.A. and was originally established in Budapest, Hungary. The bank now has four sub-branches in Prague, Vienna, Belgrade and Bucharest. See https://pic.bankofchina.com/bocappd/hungary/202405/P020240531497163523688.pdf and https://bbj.hu/business/people/interview/bank-of-china-seeks-further-expansion-in-region-ceo-says/ 7. The individual contributions from Bank of China (Hungarian Branch) and Bank of China (Central and Eastern Europe) are unspecified. For the time being, AidData assumes that each bank provided an equal contribution to the EUR 75 million syndicated loan (EUR 37.5 million each).