Clifford Chance

Clifford Chance advises on first limited-recourse project financing of gas-fired combined cycle power plant in Turkey

The international law firm Clifford Chance advised Yeni Elektrik Üretim A.Ş. on the closing of a limited-recourse US$700 million loan facility and US$80 million letter of guarantee facility to finance the development and construction of an 865 megawatt gas-fired combined cycle power plant to be established at Gebze, 60 km outside of Istanbul, Turkey, as well as the negotiation of the construction and maintenance agreements for the plant.  The project is the first true limited-recourse financing of a gas-fired combined cycle power plant in the Turkish merchant power market.

The sponsors of the project are Unit Investment N.V. (60%), an Amsterdam-based operator with significant holdings in the Turkish electricity sector, and Ansaldo Energia S.p.A. (40%), a leading producer of turnkey power plants and member of the Finmeccanica Group.

The financing was arranged by leading Turkish banks Türkiye Garanti Bankasi A.Ş., Türkiye İş Bankasi A.Ş., Vakiflar Bankasi T.A.O. and Yapi ve Kredi Bankasi A.Ş., each of whom provided 25% of the loan facilities. Total project costs are estimated to be US$1 billion.

Erhan Özil, managing director and head of corporate finance of Unit Investment N.V. said "we are very pleased to have closed this landmark project financing deal which represents another first for Unit in the evolving Turkish power market. From the outset, we sought to structure the financing so as to limit the recourse to the Sponsors while maintaining the flexibility to manage our business and take maximum benefit of our power plant’s ideal location and competitiveness within Turkey’s growing and transitioning power market". Luigi Calabria, senior vice president of Finmeccanica, added that "we are very pleased with this important transaction and congratulate all the teams involved".

The closing continues Clifford Chance's record of advising international and domestic clients on leading project finance transactions in Turkey. Clifford Chance partner Nicholas Wong commented: "we were delighted to be involved in this ground breaking transaction; it complements the significant work that we have undertaken over the last five years, assisting our clients shape the Turkish energy market".

The Clifford Chance finance team was led by Paris-based partners Nicholas Wong and Anthony Giustini, who were assisted by Adrien Belanger, Philip Sealey and Laura Marriott, also of the Paris office. The construction team was led by London-based partner Tim Steadman, who was assisted by Matthew Mulqueen and Irina Steinberg.

Turkish legal advice to Yeni Elektrik was provided by Gökhan Eraksoy, Onur Gunel and Aslı Pinar Akbaydogan of Hergüner Bilgen Özeke Attorney Partnership.

The arranging banks were represented by White & Case. The White & Case team was led by partner Jason Kerr, who was assisted by associates Carina Radford, Paul Simpson and Emily Pender.