Thai firms Chandler Thong Ek and LS Horizon, Indochina firm DFDL and international firms Milbank and Latham & Watkins have advised on a US$2.7bn project financing deal for the Lao People’s Democratic Republic that involved a syndicated, multi-tranched, multi-currency facility from nine Thai banks – Thailand’s largest ever project financing syndication and Lao’s first thermal power project.

Milbank, Tweed, Hadley & McCloy represented the project company, Hongsa Power Company, for the 1,878-MW Hongsa Thermal Power Plant – due to start commercial operation in 2015. The project company is owned by three entities: Banpu Power Limited, Ratchaburi Electricity Generating Holding Public Company and Lao Holding State Enterprise. Milbank represented Banpu and Ratchaburi who were the international sponsors for the project.

A majority of the power generated from the Hongsa Thermal Power plant –located in Lao’s Hongsa district, Xayaburi Province – will be supplied to Thailand under a 25-year power purchase agreement between the Electricity Generating Authority of Thailand and Hongsa Power Company signed last year. The balance of power produced will be supplied to Electricite du Laos.

“This transaction is not only Thailand’s largest project financing to date but represents the first thermal power project for Lao PDR,” Milbank’s Global Project Finance Group partner, who also led the Milbank team that represented the project sponsors, Karen Wong said.

Milbank won the mandate through an existing relationship with Banpu. Its relationship began when they advised the company on the BLCP Project closed in Thailand in 2002. Milbank’s capital markets practice group also advised on the 2008 IPO of Indonesian coal company PT Tambangraya Megah Tbk, which is majority-owned by Banpu.

Milbank also recently closed new recent power and coal deals in the region, including the GNP Mariveles coal-fired power project in The Philippines, the Cirebon coal-fired project in Indonesia and the Jurong Aromatics project in Singapore which the firm is currently advising.

The lenders were advised by Latham & Watkins, led by partners Joe Bevash and Stephen McWilliams.
The lenders’ Thai local counsel was Chandler Thong Ek, with partner Jessada Sawatdipong leading the team.

The lenders’ Lao local counsel were regional law firm DFDL, with David Doran in charge;and the counsel to the borrowers in relation to local Thai and Lao law was LS Horizon, led by partners Chaipat Kamchadduskorn and Chiridacha Phungsunthorn.

*The nine Thai financial institutions involved in the syndicated loan are Siam Commercial Bank, Bankgkok Bank, Krung Thai Bank, Government Savings Bank, Kasikorn Bank, Bank of Ayudhya, Siam City Bank, Export-Import Bank of Thailand and TMB Bank.ALB

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• 'Business as usual' for Thai law firms caught in political unrest (21 Apr 2010)