Shams Power CSP Plant Refinancing

Shams Power CSP Plant Refinancing

by | Mar 6, 2024 | CASE STUDIES, Power, Restructuring, Restructuring Role, U.A.E., Utilities

Sponsored by TotalEnergies, Masdar (Abu Dhabi Future Energy Company), and the Abu Dhabi Retirement Pensions & Benefits Fund, Shams Power is the first operational utility-scale CSP plant in the MENA region, underscoring the UAE’s leadership in clean energy innovation.

Tribe Infrastructure Group managed the refinancing process with a multi-phased approach, ensuring alignment with shareholder objectives and market conditions.

Tribe’s Role

Tribe employed a multi-phased approach to successfully manage the refinancing of Shams Power. This process—encompassing Market Sounding and Analysis, Recommendation and Strategy Development, Execution of Refinancing and Financial Optimisation, and Stakeholder Engagement—ensured alignment with shareholder objectives and market conditions while delivering a long-term financial solution.

Market Sounding and Analysis

  • Conducted a comprehensive review of project documents, financial models, and financing agreements to fully understand the project’s structure and financial standing.
  • Prepared and distributed teasers for market sounding, engaging with a wide range of potential lenders across banking and capital markets.
  • Collected and evaluated feedback from potential participants including banks, institutional investors and DCM desks, assessing key terms such as pricing, tenor, covenants, processes and intercreditor structures.
  • Compiled a comparative analysis of multiple feasible financing plans to guide effective decision-making.
  • Refreshed and updated analysis over time, taking into account changes due to the volatile interest rate environment.

Recommendation and Strategy Development

  • Used market insights to prepare a detailed Proposed Debt Financing and Hedging Report, offering tailored recommendations on refinancing strategies, hedging mechanisms, and potential finance providers.
  • Identified and mitigated execution risks while ensuring proposed solutions were bankable and beneficial to Shams Power and its shareholders.
  • Highlighted the anticipated impacts of refinancing on cash flow, earnings, and other shareholder metrics.

Execution of Refinancing and Financial Optimization

  • Negotiated favourable fixed margins based on Shams Power’s strong operational history to secure advantageous terms.
  • Designed alongside legal counsel the transaction steps involved with executing an Amendment and Restatement of the existing facilities, allowing for an orderly transfer of exiting lenders’ exposures and onboarding of new lenders into the process.
  • Transitioned existing loan and hedges from LIBOR to SOFR as part of Amendment & Restatement process
  • Restructured interest rate swaps taking into account the requirements of new and existing lenders as well as the optimal cashflow and earnings impacts for Shareholders.
  • Completely replaced financial model with a new operational model integrated with Shams Power’s systems allowing the Company to streamline reporting, forecasting, and integration of historical data via one bespoke tool.

Pete McCreanor, CEO, Tribe Infrastructure Group
“This successful refinancing of Shams Power highlights our commitment to delivering tailored financial solutions that align with our clients’ strategic goals. Shams is a landmark renewable energy project, and we are proud to have played a pivotal role in its journey towards long-term value creation and sustainability leadership.”

Chris Patt, Executive Director, Tribe Infrastructure Group
“Our work on the Shams refinancing demonstrates Tribe’s ability to navigate complex financial landscapes while presenting a range of innovative solutions. By aligning our clients’ objectives with the various identified refinancing options, we ensured an efficient, future-proof refinancing structure that strengthens Shams Power’s position as a regional renewable energy pioneer.”

Summary

Tribe successfully guided Shams through the entire refinancing process, leveraging a blend of market expertise, stakeholder collaboration, and financial restructuring to deliver a solution that maximised shareholder value while ensuring long-term project viability.

About Tribe

Tribe Infrastructure Group (Tribe) is focused on realising national ambitions through innovative financing and development of critical infrastructure.

Headquartered at the Abu Dhabi and with offices in London, Riyadh, Manila and Sydney, Tribe operates as an independent and agile partner, strongly grounded in responsible value creation. 

Tribe Advisory is the proprietary financial services arm of Tribe Infrastructure Group. Tribe Advisory holds a category 4 licence and is supervised and regulated by the Financial Services Regulatory Authority at the Abu Dhabi Global Market..

Manah II Solar PV

Manah II Solar PV

by | Mar 1, 2024 | CASE STUDIES, Oman

This project marks a significant milestone for both partners: Jinko Power’s first venture in Oman and Sembcorp’s inaugural renewable energy project in the Middle East while possessing over a decade of experience in Oman through its 40% stake in the Salalah Independent Water and Power Plant.

Awarded by Oman Power and Water Procurement Company (OPWP), which has recently been rebranded as Nama Power and Water Procurement (Nama PWP), through a competitive bidding process in September 2023, the project is set to begin operations by 2025 and will be supported by a 20-year power purchase agreement with Nama PWP.

The solar plant will be located in an undeveloped area approximately 30 km south of Manah, 180 km from Muscat International Airport, and 350 km from Port of Sohar. The 680-hectare site, located 340–350 meters above sea level, will necessitate the construction of ancillary access roads to ensure connectivity.

Tribe Infrastructure Group’s Role

Tribe provided comprehensive financial and commercial services throughout the entire transaction process, from the bidding phase through to financial close. Services included:

Bid Plan and Project Document Review

  • Review of the RFP and provision of recommendations for optimisation within the bid framework.
  • Review of all Project Documents, suggesting improvements from a Sponsor perspective as well as ensuring their bankability and alignment with lender and Export Credit Agency (ECA) expectations.
  • Suggesting and managing the clarifications process from a commercial standpoint.

Financial Modelling and Scenario Analysis

  • Development of a robust, bespoke financial model meeting the requirements of Lenders and Sponsors.
  • Performing valuation and optimisation in order to submit the most competitive bid while respecting all the requirements of both individual Sponsors.
  • Preparation of investment committee presentations and all required analysis to articulate financing strategies and sensitivities to market and operational changes.

Debt Raising

  • Securing committed debt financing to support the bid, in an amount and variety well in excess of bid compliance requirements, allowing Sponsors to choose from multiple potential financing plans.
  • Negotiation of financing term sheets and commitment letters with a broad range of potential lenders.
  • Coordinating the process of pre-bid due diligence and credit approval.

Financial Closing

  • Final debt structuring and comparison of options, including with respect to the overall financing structure as well as optimal mix of currencies.
  • Delivery of the final financing structure, being a blend of uncovered financing in Omani Rials alongside a USD-denominated ECA-covered tranche with different tenors and amortisation profiles.
  • Coordination of the due diligence, approval process and closing process of the lenders and the ECA.
  • Negotiation of the financing documentation relevant to both tranches including structuring of the various intercreditor issues.
  • Advising on the hedging strategy in view of interest rate exposure between PPA signature and Financial Close.

Pete McCreanor, CEO, Tribe Infrastructure Group
“The Manah II Solar project represents a landmark opportunity to support Oman’s ambitious renewable energy goals while leveraging Tribe Group’s expertise in financial and transactional advisory services. We are proud to partner with Sembcorp Utilities and Jinko Power on this transformative project, which underscores our commitment to advancing clean energy infrastructure in the region.”

Chris Patt, Executive Director, Tribe Infrastructure Group
“Our role in the Manah II Solar PV project highlights Tribe’s capability to manage complex transactions and deliver innovative financing structures. We are happy to have contributed to the success of a project which continues the impressive commitment of Oman to sustainable energy.”

Summary

The project underscores the latest step in Oman’s renewable energy ambitions and is anticipated to contribute substantially to the region’s clean energy infrastructure.

About Tribe

Tribe Infrastructure Group is focused on realising national ambitions through innovative financing and development of critical infrastructure.

Headquartered at the Abu Dhabi and with offices in London, Riyadh, Manila and Sydney, Tribe operates as an independent and agile partner, strongly grounded in responsible value creation. 

Tribe Advisory is the proprietary financial services arm of Tribe infrastructure Group. Tribe Advisory holds a category 4 licence and is supervised and regulated by the Financial Services Regulatory Authority at the Abu Dhabi Global Market.y 2018.

Al Mirfa (Project Wave) Independent Water Treatment Project

Al Mirfa (Project Wave) Independent Water Treatment Project

by | Sep 25, 2023 | CASE STUDIES, Power, Restructuring, Restructuring Role, U.A.E., Utilities

Key objectives of the project include improvements in operational efficiency, reduction in water costs, and attracting foreign and local investment while maximising in-country value. 

ADNOC and TAQA hold a joint 51% stake in the project company, with the remaining 49% owned by a consortium of Orascom Construction and Metito Utilities. 

This innovative project integrates advanced water treatment technology, extensive infrastructure upgrades, and efficient resource utilisation, solidifying ADNOC and TAQA’s commitment to sustainable energy operations. 

Tribe’s Role 

Tribe Advisory (Tribe) was selected as the sole financial advisor for phase one of Project Wave, bringing extensive experience in structuring and securing financing for large-scale infrastructure projects.  

Tribe collaborated with a diverse consortium of local and international banks to secure financing. The financial structure included a combination of commercial and Islamic facilities, ensuring a comprehensive financing package that met the needs of all stakeholders involved. 

Tribe’s responsibilities included: 

Bid Plan and Project Document Review 

  • Review of the RFP and provision of recommendations for optimisation within the bid framework.
  • Review of all Project Documents, suggesting improvements from a Sponsor perspective as well as ensuring their bankability and alignment with lender expectations.
  • Suggesting and managing the clarifications process from a commercial standpoint. 

Financial Modelling and Scenario Analysis 

  • Development of a robust, bespoke financial model meeting the requirements of lenders and Sponsors 
  • Performing valuation and optimisation in order to submit the most competitive bid while respecting all the requirements of all the individual Sponsors  
  • Preparation of investment committee presentations and all required analysis to articulate financing strategies and sensitivities to market and operational changes.

Debt Raising

  • Securing committed debt financing to support the bid, coordinating the process of pre-bid due diligence and credit approval 
  • Negotiation of financing term sheets and commitment letters with a broad range of potential lenders  
  • Delivering lenders’ initial credit approval with regard to a complex project and contracting structure with a risk allocation diverging from typical regional precedents 

Financial Closing 

  • Coordination of the due diligence, approval process and closing process of the lenders, including detailed and comprehensive technical and legal due diligence necessary to deliver lenders’ approval on the complex project and contracting structure 
  • Negotiation of the financing documentation with a large lender group 
  • Advising on the hedging strategy including bespoke elements to cover ADNOC’s interest rate risk over the entire concession tenor despite the short tenor of the initial Hard Mini Perm debt. 

James Cook, CEO-Advisory, Tribe

“Project Wave highlights our ability to navigate complex financial landscapes, tailoring strategies that deliver exceptional value to our clients. This initiative exemplifies how expert financial planning and advice an catalyse transformative impacts, particularly in enhancing the regions operational efficiency and sustainability.” 

Chris Patt, Executive Director, Tribe

“Project Wave is a defining example of how in-depth analysis and very close engagement and collaboration with lenders can power progress in more complex projects. This $2.2 billion project delivers critical infrastructure in support of the UAE’s sustainability goals and paves the way for continued improvements in sustainable water management across the region.” 

Tribe’s advisory services enabled Project Wave to reach financial close within an accelerated timeline. This achievement was underpinned by a robust financing structure provided by a group of international and local banks . The project is now positioned to enhance ADNOC’s operational sustainability while supporting the UAE’s key strategic activities.  

About Tribe 

Tribe Infrastructure Group (Tribe) is focused on realising national ambitions through innovative financing and development of critical infrastructure.  Headquartered at the Abu Dhabi and with offices in London, Riyadh, Manila and Sydney, Tribe operates as an independent and agile partner, strongly grounded in responsible value creation.  Tribe Advisory is the proprietary financial services arm of Tribe Infrastructure Group. Tribe Advisory holds a category 4 licence and is supervised and regulated by the Financial Services Regulatory Authority at the Abu Dhabi Global Market.