ICBC contributes $66.54 million USD to the $199.62 million USD term loan tranche of a $264.03 million USD syndicated loan for the Esperance Power Project

Project narrative

On October 12, 2020, financial close was reached on a deal in which a syndicate of three banks — the Industrial and Commercial Bank of China (ICBC), Westpac Banking Corporation, and Canadian Imperial Bank of Commerce (CIBC) — provided a $264.03 million USD syndicated loan to QGIF Swan Bidco Pty Ltd. — a special purpose vehicle (SPV) wholly owned by Australian solar and battery firm Contract Power Australia Pty Ltd (CPA), itself owned by Queensland Investment Corporation (QIC)-owned Pacific Energy Group (PEG) — for the Esperance Power Project. The $264.03 million USD syndicated loan was divided into two tranches: a $199.62 million USD term loan with a maturity period of four years and an arrangement fee of 120 basis points (bps) and a $64.41 million USD term loan tranche with a maturity period of four years and an arrangement fee of 39 bps. All lenders contributed equally to the two tranches: $66.54 million USD to the $199.62 USD term loan tranche and $21.47 million USD to the $64.41 million USD term loan tranche. Record ID#93875 captures ICBC's $66.54 million USD contribution to the $199.62 USD term loan tranche. Record ID#93876 captures ICBC's contribution $21.47 million USD to the $64.41 million USD term loan tranche. The proceeds of this loan were to be used by the borrower to construct, own, and operate a renewables hub, located at the Shark Lake Industrial Precinct north of Esperance, Western Australia consisting of a 4 MW solar photovoltaic plant, two 185-meter tall wind turbines with 4.5 MW capacity each (9 MW total), and a thermal power station included 11 x 2 MW gas-fueled generating sets, 3 x 850 kW diesel-fueled generating sets, a 4 MW battery energy storage system (BESS), and a liquefied natural gas (LNG) storage and vaporization facility. The hub was designed to generate enough wind and solar power to meet up to 46% of Esperance's annual electric demand and reduce carbon emissions by nearly 50% per annum compared to the existing power supply, equivalent to the removal of 6,500 cars off the road annually. In particular, due to better design and more advanced technology, the two new wind turbines would produce 61% more power than the existing turbines. The solar farm included 8,900 solar panels capable of tracking the sun. The project was expected to save the West Australian State Government $10 million AUD annually. In January 2020, Contract Power Australia (CPA) won a contract from Western Australian utility Horizon Power to supply the town of Esperance with electricity for 20 years, beginning in 2022. Pacific Energy, its parent, assisted implementation. Wind turbine foundation construction and installation was contracted to juwi Australia. Goldwind Australia signed a Turbine Supply and Installation agreement with juwi and a 10-year warranty Operations and Maintenance agreement with Contract Power Australia for the provision of Goldwind GW 155/4.5 MW wind turbines for the Esperance Power Project. Construction was planned to commence in September 2020, with commissioning scheduled for the first quarter of 2022. The renewables hub, dubbed the Shark Lake Renewables Hub, was formally opened on May 27, 2022.