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Clifford Chance advises Star Energy Geothermal Group on its dual tranche US$1.1 billion green project bond

19 October 2020

Clifford Chance advises Star Energy Geothermal Group on its dual tranche US$1.1 billion green project bond

Leading international law firm Clifford Chance has advised Star Energy Geothermal Group, Indonesia's largest geothermal company, on its offering on the Singapore Stock Exchange of a dual tranche US$1.1 billion green project bond – the first investment grade green project bond from the private sector in Indonesia.

The offering consists of US$320 million 3.25% senior secured amortising notes due 2029 and US$790 million 4.85% senior secured amortising notes due 2038, both rated Baa3 by Moody's and BBB- by Fitch and offered under Regulation S and Rule 144A.

A portion of the proceeds will be used to finance or refinance eligible green assets relating to the development, construction and operation of geothermal energy generation facilities in the Salak-Darajat contract area in West Java, Indonesia.

A cross-practice, multi-jurisdiction team in Singapore, Hong Kong, Amsterdam and New York advised on all aspects of the transaction under US federal securities and tax laws, New York law, English law, Singapore law and Dutch law. The team includes:

  • Partners Gareth Deiner and Johannes Juette, associates Stephanie Liman and Yvonne Xiao and trainee Kin Kan Chan advised on the debt capital markets, New York and US federal securities law aspects;
  • Partners Andrew Hutchins and Melissa Ng, senior associate Joanne Chan, associates Madeleine Burrill and Michael Ng, and trainee Joel Lee advised on the English and Singapore law, intercreditor, corporate and security aspects;
  • Senior counsel Tineke Kothe, associates Nolan Groenland, Robin Houtveen and Laura Stegeman and trainee Sam Akkersdijk advised on the Dutch corporate and securities aspects; and
  • Partners Avrohom Gelber and Jefferey LeMaster advised on the US tax and fund regulation aspects.

Leading on the transaction, Gareth said, "We would like to congratulate Star Energy Geothermal Group on completing this transaction, and on what is also a significant milestone in the ASEAN and Indonesian capital markets. Bringing a pure-play green project bond to the market based on underlying project assets that are focussed exclusively on geothermal energy sources is rare in the international capital markets. It is also notable that the bonds comply simultaneously with both the ICMA Green Bond Principles and ASEAN Green Bond Standards. The overwhelmingly positive response from international investors is a tremendous endorsement of what the Star Energy Group continues to accomplish in the renewable energy sector."

Melissa said, "This transaction is testament to our longstanding and valued relationship with the Star Energy Group. I am especially proud of our team who worked seamlessly across borders to bring this complex transaction to fruition. With its offering, Star Energy will strengthen its position as the largest geothermal independent power producer in Indonesia, and one of the largest in the world to develop renewable energy in the country."

The firm has a track record of advising on market-leading debt capital markets and sustainable finance transactions in Southeast Asia, including the Republic of Indonesia's landmark US$2.5 billion sukuk, Perusahaan Listrik Negara's US$1.5 billion bond issuance and Vena Energy's inaugural US$325 million green bond, the first ever US dollar Corporate Green Bond benchmark offering from a Singapore-headquartered company.