Sinan Solar: Sun raise

The largest solar photovoltaic project in the world and in value the biggest Won-denominated renewables project financing in South Korea to date, the $140 million equivalent Sinan Solar debt package also featured the first non-recourse subordinated debt tranche for a renewables deal in the country.

Sponsored by Dongyang Engineering and Construction (also EPC contractor on the project) and Sun Technics, a Conergy subsidiary, as supplier of the photovoltaic system. The project entails the development of a 19.6MW solar power station in Sinan, south-west of Seoul, and is due to come on-line this year.

The sun tracking system will be 600,000m2 and generate 27,000MWh to supply over 6,000 households in the region. Donyang has a 15-year fixed tariff agreement with the Korean government for supply at a non-indexed rate of $110/MWh.

Sole lead arranged and underwritten by Standard Chartered through its Korean subsidiary SC First Bank, the financing comprises a $120 million Won equivalent 14.5-year senior tranche and a $20 million equivalent sub-debt piece with the same tenor. Dongyang is injecting W15.6 billion of equity into the project.

The construction loan covers 87.5% of the total $140 million construction costs and then converts to term loans upon the start of commercial operations. Interest rate risk has been hedged through a swap.

Participants in the deal were: Kumho Life Insurance, Tong Yang Life Insurance, National Federation of Fisheries Cooperatives, and Kwang Ju Bank.

Dongyang expects to recover its equity investment within 10 years and after year 15, when the debt is paid off, the plant could have up to another 25 years of useful life.

Sinan Solar
Status: Closed 1 May 2007
Description: 19.6MW solar photovoltaic plant
Sponsors: Donyang Engineering & Construction Co.
Financial adviser: Standard Chartered
Mandated lead arranger: Standard Chartered First Bank
Participating lenders: Kumho Life Insurance, Tong Yang Life Insurance, National Federation of Fisheries Cooperatives, and Kwang Ju Bank
Legal counsel to sponsor: Lee & Ko