1 June 2017
Clifford Chance advises Kuwait National Petroleum Company on world's largest ECA financing for corporate purposes
International law firm Clifford Chance advised Kuwait National Petroleum Company (KNPC) on a US$6.245 billion export credit agency (ECA) financing for the KNPC Clean Fuels Project. The latest tranche is part of the landmark US$10 billion financing and the first time that KNPC has tapped international financial markets. Clifford Chance also advised long-standing client KNPC on the first tranche of the financing which saw KNPC tap domestic Kuwaiti debt markets for the first time.
The ECA facility is supported by seven agencies including: K-SURE, KEXIM, SACE, JBIC, NEXI, Atradius, and UK Export Finance and included, as part of the financing, a club deal with 10 international banks for a total amount of US$4.245 billion under the K-SURE, SACE, Atradius and UKEF ECAs and a further US$500 million with four international banks under the NEXI ECA.
Clifford Chance worked in conjunction with NBK Capital who were the exclusive financial adviser on the deal and Al Tamimi & Co as Kuwaiti counsel to KNPC.
Not only is the deal the largest ECA financing for corporate purposes in the world, it is also Kuwait's largest ECA financing to date. In early 2016, Clifford Chance advised KNPC on the first tranche of the financing which involved mandated lead arrangers National Bank of Kuwait (NBK) and Kuwait Finance House, on the conventional and Islamic finance tranches respectively.
The Clean Fuel Project (CFP) will upgrade and expand two of Kuwait's largest existing refineries at Mina Abdulla and Mina Al-Ahmadi. The CFP will transform the two refineries into an integrated merchant refining complex with a focus on producing higher-value products such as diesel and kerosene for export. Total refining capacity of this complex after completion will go up to 800,000 barrels a day.
Dubai-based Lead Partner, Peter Avery commented: "We are very proud to be involved in supporting KNPC on the ongoing development of its Clean Fuel Project. This historic financing was achieved through the excellent and long-standing working relationship we hold with KNPC as well as NBK Capital and all of the ECAs and international banks involved in the transaction. The deal cements Clifford Chance's strength in project finance and export finance transactions in Kuwait and the wider Middle East."
The Clifford Chance team was led by Peter Avery (Partner, Dubai) who was supported by Mark Valenzia (Senior Associate, Dubai), Yiting Xu (Senior Associate, Dubai), Lilly Alamir and Jessica Eilts (Associates, Dubai). Construction aspects of the project are being led by Sandy Hall (Partner, London) and Tim Steadman (Construction, London) with support from Paul Coates (Senior Associate, London).
Clifford Chance has also recently advised National Bank of Kuwait on the establishment of its US$3 billion GMTN programme and its inaugural Rule 144A/Regulation S international debt capital markets issuance thereunder as well as the State of Kuwait on the establishment of its GMTN programme and debut dual-tranche US$8 billion issuance. The team continues to advise on some of Kuwait's most prominent projects including advising on the Az Zour North 2 IWPP, and Az Zour North 1 IWPP.