Financing Infrastructure & Energy Projects in Cambodia A Practitioner Perspective

Transcription

1 CLICK TO EDIT MASTER TITLE STYLE Financing Infrastructure & Energy Projects in Cambodia A Practitioner Perspective PPP Seminar Phnom Penh, Cambodia 12 December 2014 BANGLADESH CAMBODIA INDONESIA LAO P.D.R. MYANMAR SINGAPORE THAILAND V IETNAM BANGLADESH CAMBODIA INDONESIA LAO PDR MYANMAR SINGAPORE THAILAND VIETNAM

2 Presentation Outline 1 Infrastructure and Energy Landscape 2 Financing Projects in Cambodia 3 Legal Framework and Applicable Law 4 Case Studies 5 Concluding Remarks 2

3 Presentation Outline 1 Infrastructure and Energy Landscape 2 Financing Projects in Cambodia 3 Legal Framework and Applicable Law 4 Case Studies 5 Concluding Remarks 3

4 Infrastructure Landscape Over the next decade ASEAN nations will require approximately $ billion a year to fully address the region's infrastructure needs. 4

5 Infrastructure Landscape 5

6 Infrastructure Landscape 6

7 Infrastructure Landscape 7

8 Infrastructure Landscape 8

9 Financing projects in Cambodia 1 Infrastructure and Energy Landscape 2 Financing Projects in Cambodia 3 Legal Framework and Applicable Law 4 Case Studies 4 Concluding Remarks 9

10 Energy Projects Hydro Power Lower Sesan 400MW Lower Sesan 2 hydro power plant of Hydro Power Lower Sesan 2 Co., Ltd. Financed by CDB CPTL project 221km of 115kV transmission lines of CPTL Initially financed by ADB, Arco, Thai Exim and FTB $23.5M Stung Russey Chrum hydroelectric 338MW Lower Stung Russey Chrum hydroelectric project of China Huadian Financed by China Exim $412M. Sihanoukville coal fired power plant 100MW Sihanoukville coal fired power plant of Cambodian Energy Limited Financed by OCBC, Maybank, AmBank and Bank of China - $140M Kamchay hydro project 194.1MW Kamchay hydroelectric project of Sinohydro financed by China Exim $170M 10

11 Infrastructure Projects Mobitel Telecom Project Private financing for the purchase of a majority stake of the largest telecom operator in Cambodia Financed by Bank of China $421M Water projects A project to build the first phase of a new water production facility of a capacity of 130,000m3/day in Niroth, Phnom Penh and to extend PPWSA transmission and distribution network (financed by AFD EUR30M) Road/Bridge projects Highway to Sihanoukville 35-year concession project granted to AZ Distribution to maintain and service the National Route 4. Airport projects: The 3 airports of SCA Financed by IFC and PROPARCO $40.1M 11

12 Presentation Outline 1 Infrastructure and Energy Landscape 2 Financing Projects in Cambodia 3 Legal Framework and Applicable Law 4 Case Studies 4 Concluding Remarks 12

13 General Legal Framework (in preparation - planned) PPP unit at MEF Payment mechanisms Guarantees Governing Law Liability of contractor Land PDF/VGF AMENDED Law on Concessions Law on Procurement Consistency with other laws Law on Investment Detailed guidelines Authority and roles of GCAs VFM analysis Feasibility study State support/vgf Investor selection NEW Sub-decree On PPP Investment STANDARDIZED Project Contracts Bidding Document Guarantee Forms Words highlighted in red indicate important changes required to existing text of the LoC 13

14 Applicable Law Legal Framework Law on Concessions (an Implementing Sub Decree will be enacted) LEGAL FRAMEWORK Law on Investment Laws applicable to the grant of security interest: Law on Secured Transactions, Civil Code and Land Law. Law on Environment Protection and Natural Resource Management Laws applicable to specific sector: Law on Electricity, Law on Management and Exploitation of Mineral Resources, Road Law, Telecom Law (draft), etc. 14

15 Practitioner Experience Security package Pledge over Shares Mortgage over Plant and Machinery Assignment of Accounts Receivable Assignment of Project Documents Hypothec over Immovable Property (Land, Building, Perpetual Lease, fixtures) Offshore Account Charge Direct Agreement with the government 15

16 Practitioner Experience Social and environmental impact Due diligence on the project site (protected area, conflicting interest, illegal occupants) Settlement process (led by the authority and usually paid by the investor) Compensation based on market price for legal occupants Conducting environmental impact assessment (mandatory, mitigation measures, to be approved by MoE) 16

17 Presentation Outline 1 Infrastructure and Energy landscape 2 Financing projects in Cambodia 3 Legal Framework and Application 4 Case Studies 5 Concluding remarks 17

18 Case Study 1: Transmission Line Cambodia-Thailand Re- financing Type: ADB / Thai Exim Bank Local Bank Size: USD 10 million + Structure of the project ADB Thai Exim Bank Local shareholders Local Bank Challenges No government guarantee Cross-border project Syndicated loan PE Fund FTB > USD 20 million PPA EGAT CTPL EDC Power Transmission Agreement Concession Agreement MIME Transmission Lines + Sub-stations Security structure Share pledge Licenses / contract All movable + immovable assets Receivables + bank accounts 18

19 Case Study 2: Airport Infrastructure Lenders: IFIS IFC (17.5M) Debt Equity VINCI (70% shares) MMC (30% shares) PROPARCO (17.5M) Shareholders' Agreement Financing Documents SCA Concession Agreement RGC Challenges No government guarantee Syndicated loan Direct Agreement Security structure Share Pledge Agreement Conditional Assignment Agreement of Project Contracts, Rights and Authorizations Debt Service Standby Letter of Credit PPIA SRIA SIA 19

20 Case Study 3: A HPP Financed by an Offshore Bank Lenders: Offshore Banks Debt Offshore Bank USD XXXM RGC Guarantee of Payment Financing Documents Equity Shareholder USD XM (100%) IA/Lease Agreement Project Company RGC/MIME 100% EDC PPA (100%) Challenges Lack of clear and comprehensive regulatory guidance Relatively new regulations governing loan and security Lender not familiar with local regulations and practice Security structure Lease and Building Security Agreement Plant and Machinery Security Agreement Project Documents and Accounts Receivable Assignment Agreement Offshore Account Charge Agreement Share Pledge Agreement Direct Agreement 20

21 Presentation Outline 1 Infrastructure and Energy landscape 2 Financing projects in Cambodia 3 Legal Framework and Application 4 Case Studies 5 Concluding remarks 21

22 Thank you Martin Desautels Managing Partner 22

23 CLICK TO EDIT MASTER TITLE STYLE Excellence Creativity Trust Since 1994 BANGLADESH CAMBODIA INDONESIA LAO PDR MYANMAR SINGAPORE THAILAND VIETNAM BANGLADESH CAMBODIA INDONESIA LAO P.D.R. MYANMAR SINGAPORE THAILAND V IETNAM