Financing for the Maamba coal power plant in Zambia, estimated at US$828mn, has finally closed after four years of efforts and navigating through bureaucratic hurdles, on a debt-equity ratio of 70:30.

The financing will enable Maamba Collieries Limited to complete the construction of two 150MW coal-fired power plants on the site of an existing coal mine as well as a new transmission line to connect to the national grid. The project finance debt was raised via two tranches: one US$365mn tranche backed by China’s ECA Sinosure and involving Barclays, Bank of China, Industrial and Commercial Bank of China, and Standard Chartered; and a US$150mn tranche provided by Industrial Development Corporation of South Africa and the Development Bank of Southern Africa. Clifford Chance advised on the deal’s project finance documentation and political risk guarantee policy.

The remaining financing is funded through equity by Nava Bharat Ventures and the Zambian state-owned ZCCM Investment Holdings, the deals sponsors and owners of 65% and 35% of the plant respectively. “We expect that project financing in Africa will take a cue from this transaction of how deals can be structured covering multiple geographies, in the infrastructure space, which is the need of the hour in Africa,” says GRK Prasad, executive director of Nava Bharat Ventures.

Barclays acted as global co-ordinating bank, project finance advisor, ECA advisor, bookrunner, lead mandated lead arranger and hedge co-ordinator. “The Maamba transaction is a true landmark for Zambia, delivering 300MW of power through a multi-sourced IPP project finance structure and helping to diversify the power generation in the country through thermal power,” says Saviour Chibiya, managing director of Barclays Bank Zambia.

This is Sinosure’s first project finance in Sub-Saharan Africa as, until now, Sinosure and Chinese state entities have typically dealt directly with sovereign entities. The deal is also one of the first African project financings for Bank of China and Industrial and Commercial Bank of China. Sepco Electric Power, a Chinese EPC contractor, is responsible for constructing the power station and the transmission line.

According to a statement by Nava Bhurat, the project has already achieved 80% of progress in all facets of implementation and is scheduled for commissioning by mid 2016.