Genting Jangi Wind Farm

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In September 2010, Genting Berhad of Malaysia established GP Wind (Jangi) Private Limited, in agreement with Gujarat Government, to develop a 91.8MW wind farm located at Jangi town Kutch district in the state of Gujarat. The wind farm would involve the building of 51 wind turbines of 1.8MW capacity each. The farm was expected to have a load factor of 33%. The electricity generated from the project would be evacuated by the Gujarat state grid. A fixed-price EPC for the power plant had been awarded to Vestas Wind Technology India Private Limited in December 2010. Once the project was commissioned, Vestas would assume responsibility for turbine operation and maintenance services. GP Wind (Jangi) Private Limited had entered into a 25-year Power Purchase Agreement with the state utility Gujarat Urja Vikas Nigam Limited (GUVNL), which would be effective at the time of commissioning of the project. The APPC (Average Power Purchase Cost) tariff as per GERC (Gujarat State Regulator) tariff order was US$ 0.08/Unit (INR 3.56 per unit @ 45INR/USD). The total capacity of 91.8 MW was eligible under REC as per the CERC and was also eligible for GBI (Generation Based Incentive) benefits and UNFCC had started the validation project for Certified Emission Reductions (CERs) in April 2011. Financial closure took place on 24th March 2011.The total project cost was US$ 152mn.The debt equity ratio for the project was about 72/28. Financing comprised Debt of US$ 110mn and sponsor equity of US$ 42mn. Debt was composed of a 15year 3months term loan (covered tanches) of US$ 66mn and a 13year 3months term loan (uncovered tranches) of US$44mn. The US$ 66mn loan was arranged by Sumitomo Mitsui Banking Corporation (SMBC $24mn) and HSBC ($42mn) and guaranteed by Eksport Kredit Finansiering A/S,the Danish export credit agency. The loan had a grace period of 1year 5months and a repayment schedule of 56 quarterly instalments. The US$ 44mn loan was arranged by SMBC ($16mn) and HSBC ($28mn).The loan had a grace period of 1year 5months and a repayment schedule of 48 quarterly instalments.Both the ECB have been swapped into local currency to mitigate exchange risk exposure.The structure also featured a fixed interest rate for the life of the swap, thus providing an advantage over domestic currency financings that were subject to annual resets of interest rates.In terms of roles on the transaction, in addition to the role of sole structuring bank, HSBC was appointed as the mandated lead arranger, swap counterparty, agent for the commercial facility and EKF facility, security agent and account bank. SMBC was appointed as a mandated lead arranger. Construction for the wind farm was expected to start in March 2011 and commercial operation was expected to start in August 2011.