Shearman & Sterling has advised a syndicate of local, regional and international banks as lenders to the Salalah II US$438,130,000 independent power project (IPP) in the Dhofar region of the Sultanate of Oman. The project is being developed by a consortium comprised of Mitsui & Co.Ltd., International Company for Water and Power Projects (ACWA Power) and Dhofar International Development and Investment Holding Company as project sponsors. The project achieved financial close on 25 August 2015.
The project debt has been structured on a long-term, limited recourse basis to finance the development, construction, ownership and operation of the new 445 MW high efficiency gas-fired power generation facility in Oman. The project also involved the acquisition of all shares in Dhofar Generating Company (DGC) and the operation and maintenance of the existing 273 MW natural gas fired power plant in Raysut, which is owned and operated by DGC. The existing brownfield power plant in Raysut together with the greenfield power plant are expected to have a minimum combined capacity of 573 MW and a maximum combined capacity of 673 MW of power generation by January 2018.
The lenders included Standard Chartered Bank, Mizuho Bank, Ltd., KfW IPEX Bank GmbH, Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank, Bank Muscat and Bank Dhofar.
The Shearman & Sterling team was led by partners Robin Bayley (Abu Dhabi-Project Development & Finance) and Ben Shorten (Singapore-Project Development & Finance) and counsel Brendan Hundt (Saudi Arabia-Project Development & Finance) and Gregor Page (London- Project Development & Finance). Associates Ibrahim Bakhurji and Samuel Ogunlaja (both Abu Dhabi-Project Development & Finance), and Josephine Du Sauzay and Nicolas De Clercq (both London- Project Development & Finance), as well as trainees Michele Smith and Daniel Frost (both London- Project Development & Finance), provided assistance on the transaction.