29 March 2019

KWM assists Chinese investor in completing the development and achieving the financial close of Pakistan’s first HVDC transmission BOOT project (Matiari-Lahore HVDC Transmission Project), a key project under the Belt and Road Initiative

At the end of February 2019, Pakistan’s Private Power Infrastructure Board (“PPIB”) officially confirmed the financial close of Pakistan Matiari-Lahore HVDC Transmission Project (the “Project”) invested, constructed and operated by China Electric Power Equipment and Technology Co., Ltd. (“CET”), a subsidiary of State Grid Corporation of China. It marks the successful completion of the project development and the financial close of the Project. The Federal Minister of Energy of Pakistan, the Federal Secretary of the Ministry of Energy of Pakistan, the Minister-Counselor of the Chinese Embassy in Pakistan, and the top management of CET attended the official ceremony. This is another milestone in the implementation of the Project, following the execution of the main project agreements on 14 May 2018 which was witnessed by the Prime Minister of Pakistan and the Chinese Ambassador to Pakistan.

Spanning approximately 878 kilometers having the transmission capacity of 4,000 MW and total investment amount of USD 1.658 billion, the project will become the longest transmission line with the highest voltage and transmission capacity in Pakistan and help significantly alleviate the power shortage in Punjab Province and the Islamabad Capital Territory, the most important economic hub of Pakistan. As one of the priority projects under the China-Pakistan Economic Corridor framework and a key project under the Belt and Road Initiative, the Project will become Pakistan's first high-voltage direct current (HVDC) transmission line, as well as the first BOOT (build-own-operate-transfer) electricity transmission project developed by a foreign investor.

King & Wood Mallesons (“KWM”) acts as lead legal counsel in this project advising CET on Mainland China and Hong Kong law, and coordinating local counsel’s work in Pakistan. KWM has been involved in the development of the  Project since 2015, and represented CET since the launch of the project up until its financial close, participating in numerous rounds of negotiations, preparing project agreements and financing documents and working closely with the Government of Pakistan (represented by the PPIB), Pakistani National Transmission & Despatch Company Limited  (“NTDC”) , China Development Bank and China Export & Credit Insurance Corporation. KWM has also assisted CET in carrying out legal due diligence, establishing holding and project companies, obtaining approvals and achieving conditions precedent to the financial close.

KWM’s team  was led by partners Tian Wenjing, Lv Yinghao, and Liu Zhizhi.

Ms. Tian Wenjing said, "KWM has been involved in the Project for nearly four years, participating in more than a dozen rounds of tough negotiations in both China and Pakistan, and helping our client to successfully complete the project development and achieve the financial close. The Project is a key project under Belt and Road Initiate supported by KWM’s one-stop and full life-cycle legal services. This is a long-term, unprecedented and unique project involving many special issues due to factors including multi-party involvement, special nature of assets, various needs for land rights and long-term operation risks. KWM, in collaboration with CET’s project team and other advisors, had to come up with some groundbreaking and innovative solutions and address various challenges at different stages, including transaction structuring, drafting and negotiating project agreements and financing documents, and achieving the financial close. This project demonstrates our capability and extensive experience in advising projects under the Belt and Road Initiative, management skills, ability to handle complex and innovative transactions, and value-add services in risk identification and control. We always strive to help Chinese enterprises’ ‘going global’ and this Project is yet another successful example of our efforts.” 

 

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