Sur IPP Project Financing Summary

Sponsor - US$ 0.38 billion

Equity (24%)

Marubeni

JBIC (56%)

Commercial Banks (29%)

NEXI (15%)

Debt Financing

Axia Power (32.5%)

Supplier (MoG*)

NGSA*

shareholder

Suhail Bahwan Group, a leading business house in Oman

100%

Chubu Electric (19.5%)

QEWC* (9.75%)

Multitech (3.25%)

Public (35%)

Offtaker - OPWP

Returns

SPV (Phoenix Power Company)

PPA*

Offtaker (OPWP*)

Public  35% 

Tendering authority 15 years PPA*

Fuel charges from (virtual pass-through cost)

Tenture Margins

14 years after COD Libor + Margin

Electrical energy charges

No Cash Sweep Mechanism Maintenance Reserve is not required Debt Service Coverage Ratio Event of default : below 1.05 Threshold for distribution of dividends : 1.10 Debt Service Reserve (or Shareholders’ credit support) Base DSRA Starting from COD Target level Six months’ of future debt service

Supplier - MoG

EPC Contractor Daewoo E&C

$ bn 0.12 0.07 0.04 0.01 0.13 0.38

Axia Power  32% 

Multitech  Chubu  3%  QEWC  Electric  11%  19% 

Total Tariff

O&M (POMCo*)

Power capacity charges 97% (excl. fuel charge)

A long term NGSA over the contracted PPA period Any increased gas price charged by MoG is passed through in the PPA with OPWP If PPA is extended, the NGSA will be automatically extended.

Backstop DSRA from the 4th anniversary of COD Six months’ of future debt service of JBIC and NEXI

Equity Structure Axia Power Chubu Electric QEWC Multitech Public Total

Debt Service Equity

JBIC  56% 

Qatar Gov't as a major

CEPCo

100%

NEXI  15%  Comm ercial  Banks  29% 

th

June 7 , 2015

Lender - US$ 1.2billion

0.67 0.35 0.18 1.2

JBIC Commercial Banks NEXI Total

Debt (76%)

billion)

Overall US$1.6bn, 76% debt/24% equity Lender Structure $ bn

Asset (US$1.6

EPC Contractor - Dae Woo E&C

BOO* Spot marke receive prices determined on a day-to-day basis

EPC cost $1.24 billion / LD $72 million LD* is almost 6% of EPC cost. This is usually more than EPC contractor's profit.

O&M - POMCo

Owner-operator company LTMC* & LTMDA* for 19 years (2011~2030) with SIMENS

* Refer below QEWC

Qatar Electric & Water Company Q.S.C.

OPWP

Oman Power and Water Procurement Company SAOC.

MoG

Ministry of Oil & Gas/

POMCo

Phoenix Operation and Maintenance Company LLC

LTMC

Long Term Maintenance Contract

LTMDA

Long Term Maintenance Direct Agreement

NGSA

Natural Gas Sales Agreement

LD

Liquidated Damages

Key Insights

1) Minimum DSCR requirement is 1.05. Financial modeling (refer the attached excel file) shows the project cash flow is hard to meet this without deferred tax and other income. It is considered that tight PPA & fuel risk mitigation by NGSA allowed this marginal DSCR. Especially, both 97% fixed capacity charge (except fuel charge) out of total revenue from OPWP and fuel cost pass through guaranteed strong predictability of cash flow. Also base and backstop DSRA or shareholders' credit support were required to support above. However considering the project's cash flow (refer the attached excel file) mataining base and backstop DSRA seems impossible. It is estimated that the project were supported by shareholders' credit. 2) 35% of shares will be held by public through IPO. Their benefit will be upto the performance of the firm after 2028. As per the IPA* research, it is expected that there will be few difference between single buyer and liberalised market revenue. However, after 2029, PPA, NGSA & LTMC will be over and this will unfreeze tightly structured cash flow.

Project Development Time Table RFP

Financial close

Preferred bidder selection 2010

2011

2012

2013

2014 Ji Won Seo

PPA Bid submission

COD

[email protected] http://pfcasestudy.blogspot.com https://www.linkedin.com/profile/view?id=69053747&trk=nav_responsive_tab_profile Source:

Phoenix Power Company SAOG IPO Prospectus

CS_Phoenix Power Company SAOG Financials (2)(2)(2)(1).pdf ...

POMCo Phoenix Operation and Maintenance Company LLC 1) Minimum DSCR requirement is 1.05. Financial modeling (refer the attached excel file) shows the project cash flow is hard to meet. LTMC Long Term Maintenance Contract this without deferred tax and other income. It is considered that tight PPA & fuel risk ...

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