White & Case has advised project borrower Gulf Power Generation Co. and its parent company Gulf Electric Public Co. in the US$663m project financing of a 1,468MW combined cycle gas turbine power plant to be constructed at Kaeng Khoi in Saraburi Province in Thailand.
Singapore-based partner Brian Miller led the firm's team, which included partners Daniel Chung, Chinnavat Chinsangaram and Pakdee Paknara.
Having first advised Gulf and its sponsors in their bid in the 1994 Independent Power Producer Program, White & Case's role both as Thai and international counsel involved: the negotiation of a 25-year power purchase agreement with the Electricity Generating Authority of Thailand (EGAT); natural gas and diesel fuel supply agreements with PTT Public Co.; construction and supply contracts with Mitsui & Co.; a long-term capital equipment supply contract with gas turbine supplier Alstom; as well as all financing and security agreements.
Baker & McKenzie acted as Thai counsel to the lenders on the deal, which marked an important milestone in Thailand's power sector development strategy.
The Kaeng Khoi 2 Power Project is a combined cycle gas turbine power plant project with two 734MW generating blocks each of which will have two gas turbine generator units capable of operating on natural gas and liquid fuel, two associated heat recovery steam generator units, and one steam turbine generator unit.
Participants in both the US dollar and Thai Baht tranches of the financing were led by Siam City Bank Public Co. and Thai Military Bank Public Co. Next year, Gulf Power will seek to close the second phase of the financing, which is a planned refinancing of the US dollar tranche with the Japan Bank for International Cooperation and one or more commercial banks. Mizuho Corporate Bank has been appointed the structuring coordinator for the second phase of the financing.
The Kaeng Khoi 2 Power Project has overcome a number of obstacles over the past nine years, including changes in the project's fuel type from coal to natural gas and relocation from Prachuab Khiri Khan Province to Saraburi Province. It is hoped that the successful closing of the financing is a strong sign of confidence in Thailand's long-term strategy for expanding electricity generation.
White & Case's Miller said: "With the timely closing of financing for the Kaeng Khoi 2 project, Gulf Power will be able to bring critically needed generating capacity on line in early 2007."
The 1,468 MW power plant will play a vital role in meeting Thailand's future electricity demand, which is expected to reach approximately 41,000MW in 2015, based on forecast annual growth of 6% to 7%. Energy consumption in Thailand is currently around 19,300MW.
Gulf Power is a wholly owned subsidiary of Gulf Electric Public Company Limited, a Thai independent power producer owned by Electric Power Development Company (more commonly known as J-Power) and Electricity Generating Public Company Limited (EGCO). Gulf Power was originally established to build, own, and operate a 734MW coal-fired power plant on the Gulf of Thailand, as one of seven power projects selected by the Thai government to participate in Thailand's first IPP program. The Thai government subsequently decided that Gulf Power should develop a 1,468MW combined cycle gas turbine power plant in Sariburi Province instead of the coal-fired plant.