Mandated lead arranger, sole underwriter and bookrunner WestLB has closed a PLN215mn (US$95.5mn) project finance loan for power company Electrocieplownia Nowa Sarzyna (ENS) in Poland. The financing is particularly unique as it the first project finance deal to be signed following changes to the Polish energy market.
The financing was arranged to refinance ENS' outstanding debt, and create a highly structured bond facility for working capital purposes.
WestLB syndicated a pre-closing of a PLN175mn 10.5-year senior loan among four lenders: ING, WBK (a subsidiary of Allied Irish Bank), DZ Bank, and Kommunalkredit Austria. The financing was significantly oversubscribed.
WestLB also provided a new PLN40mn bond facility for working capital purposes.
The deal structure had to be adapted to fit with new legislation brought about by Poland's accession to the European Union.
Historically, ENS and other Polish generators sold output under a long-term offtake contract to Polska grupa Energetyczna, a state-owned entity. However, the European Commission ruled last year that those offtake contracts were illegal state aid. This meant these offtake contracts had to be voluntarily terminated by the power companies. A compensation scheme has been set up for these firms.
Jacek Glowacky, general manager of ENS, comments: "this is a significant milestone in the present credit climate and demonstrates the strategic importance of ENS in the Polish power market. It clearly enhances our potential to deliver energy for development.”
ENS is a subsidiary of AEI, previously known as Ashmore Energy International, a company that owns and operates energy infrastructure businesses in emerging markets.
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