Tina River hydro closes ECA/DFI-backed loan
Sponsors of the 15MW Tina River hydropower project in the Solomon Islands – state-owned Korea Water Resource Corporation and Hyundai Engineering Corporation (HEC) – reached financial close on an approximately $200 million ECA/DFI-backed debt package on 16 December. The deal marks the country's first ever PPP contract.
The project, which has a total cost of $240 million, is backed by a 30-year DBFOT concession, and will be financed via SPV Tina Hydropower on a debt-to-equity ratio of 95:5. Joint sponsor HEC signed a $165 million turnkey EPC contract with the project company on 30 September. Construction is scheduled to begin in 2020, with completion expected in mid-2025.
Lenders on the deal include, Green Climate Fund ($70 million), the World Bank's International Development Association ($33.63 million), Abu Dhabi Fund for Development ($15 million), ADB ($18 million), Kexim’s Economic Development Cooperation Fund ($31.6 million), and the Australian Government put up $12.7 million. The concessional loans have tenors ranging from 15 to 40 years.
The IFC (financial adviser) provided credit to DevCo – a Private Infrastructure Development Group entity with funding from the Dutch and Swedish governments, the Energy Sector Management Assistance programme, the Global Infrastructure Facility and the Australian and New Zealand governments' Pacific Partnership.
Norton Rose Fulbright acted as legal counsel to the sponsors, while PwC Korea provided advice on financial matters.
