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Electrogas Malta Limited closes the project financing of the Delimara 4 LNG to Power Project

15th January 2018

International law firm Winston & Strawn LLP has advised on the completion of a major first-of-its-kind project development and financing.

Stephen Jurgenson led the team

Winston advised Electrogas Malta Limited (EGM), and its owners Socar Trading S.A., Siemens Project Ventures GmbH, and GEM Holdings Limited, in relation to the development and financing of the Delimara 4 LNG to power project in Malta. 

The project is the first integrated LNG to power project in the world, where investors and financiers take the risk of sourcing LNG on a non-recourse basis.

‘The project is central to the Government of Malta’s strategy to switch from heavy fuel oil power generation to cleaner, gas-fired power generation, and is key for the future security of energy supply in the country,’ said Stephen Jurgenson, Partner at Winston & Strawn.

Enemalta plc awarded a series of long term agreements to EGM for EGM to develop the 210 MW CCGT Delimara 4 power plant, LNG regas facilities, and a floating LNG storage unit, and to supply electrical energy and gas to Enemalta.

To implement the project, EGM entered into a long term LNG Sale and Purchase Agreement with Socar Trading S.A. to source LNG for the term of the project.  EGM raised finance from commercial banks and entered into construction contracts with Siemens Austria and J&P Avax, long term FSU Charter and operation and maintenance agreements with Bumi Armada Berhad, and operation and maintenance agreements with ESB International and Reganosa. 

EGM sought project financing, and the project was structured on a non-recourse basis.  The project financing was closed in late December 2017, and comprises equity plus a senior debt package in the region of €400 to €500 million from the following financial institutions: KfW-IPEX, Societe Generale, HSBC, Bank of Valletta, Natixis, BNP Paribas, DZ Bank, Crédit Industriel et Commercial, Rivage Investment, and Arguin Infrastructure Partners.

Winston & Strawn deployed a team of lawyers based in London and Dubai, led by James Simpson, Stephen Jurgenson and Shibeer Ahmed. The team acted as legal counsel throughout and on all aspects of the project, including advising on tendering, deal structuring, risk and bankability issues, competition law issues, and the large number of unique project and financing documents.

 

 

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