Financing For Zhuhai Power Station Completed

12 September, 1996 - Hong Kong

Project financing has concluded for the US$1.2 billion (HK$9.4 billion) Zhuhai Power Station in Guangdong. Financing facilities were provided to the Guangzhou Zhuhai Power Station Company through the PRC's largest limited recourse project financing agreement.

The Guangdong Zhuhai Power Station Company Limited, a joint venture company owned by the respective subsidiaries of Cheung Kong Infrastructure Holdings Limited (CKI), Guangdong Electric Power Holding Company (GEPH) and The Electric Development (Group) Co of Zhuhai SEZ (EDC Zhuhai), signed the project financing agreement with The Export Import Bank of Japan (JEXIM), The Bank of Tokyo-Mitsubishi Ltd and a syndicate of 11 banks.

The financing facilities, totaling US$795.5 million, consist of US$670 million in 16-year Japanese export credit facilities and US$125.5 million in 12-year commercial facilities, supplemented by US$166 million (approximately HK$1.3 billion) and RMB1,765 million in equity from the project shareholders, and a RMB504 million loan provided by China Construction Bank.

The Zhuhai Power Station will consist of two coal-fired generating units of 700 megawatts each, totalling 1,400 megawatts. In terms of generating size, it will be the largest thermal power station in the PRC. The power plant will be constructed on a turnkey basis by a Mitsubishi consortium consisting of Mitsubishi Heavy Industries Limited and Mitsubishi Corporation of Japan.

According to Mr Victor Li, Chairman of Cheung Kong Infrastructure Holdings Limited, "Today's loan signing is a milestone event. The contract we signed today represents the largest project financing on a limited recourse basis in China, and is a breakthrough for project financing in the PRC."

"Due to its limited recourse basis, the financing will be provided without guarantees from either the Chinese Government or financial institutions," explained Mr Li.

The JEXIM facilities are the export credit agency's first project financing on a limited recourse basis in the PRC. JEXIM will provide 60% of the facilities in the form of a direct loan. The remaining 40% will be provided by The Bank of Tokyo-Mitsubishi with insurance cover from Japan's Ministry of International Trade and Ministry.

Senior Managers of the commercial facilities are Bank of China, Hong Kong Branch and The Hongkong and Shanghai Banking Corporation Limited (each providing US$19 million).

Lead Managers are The Dai-Ichi Kangyo Bank, Limited, Hong Kong Branch; The Fuji Bank, Limited; The Nippon Credit Bank, Limited, Hong Kong Branch; The Sakura Bank, Limited and The Sanwa Bank, Limited, Hong Kong Branch (each providing US$14.5 million).

Managers are Bank of China, Luxembourg Branch; Bank of China, New York Branch IBF; The Sumitomo Trust & Banking Co., Ltd. (each providing US$4 million), and Bank of China, Sydney Branch, providing US$3 million.

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