Milbank LLP advised Industrial and Commercial Bank of China (“ICBC”) and the Export-Import Bank of China (“CEXIM”) as lenders in connection with two loan facilities totaling €500 million extended to the Republic of Guinea to fund two major transportation infrastructure projects.
The two Sinosure-covered facilities were provided to Guinea represented by the Ministry of Economy and Finance of Guinea as the borrower under the Silk Road Economic Belt Initiative. Proceeds from the funds will be used to fund the Road #1 Rehabilitation Project Coya-Mamou-Dahola (Le Projet de Route Nationale Coya-Mamou-Dahola) and the Rehabilitation of the Conakry Urban Road Network (Réhabilitation de la voirie urbaine de Conakry).
The transaction employed a highly innovative structure by which, in order to meet ICBC and CEXIM’s credit and bankability requirements, the borrower allocates certain taxes due to it in respect of certain mining projects being conducted in Republic of Guinea as credit enhancement for the payment of the obligations of the borrower under each of the Sinosure covered facilities. This marks the first time this structure has been successfully implemented in the Republic of Guinea.
The Milbank Global Project, Energy and Infrastructure Finance team was led by partners Shepard Liu in Beijing and Aled Davies in Tokyo, with associates Guannan Wang in Beijing, Aaron Mundy in Tokyo.
“Structuring the deal to meet the credit requirements of Sinosure and financeability requirements of the lenders while balancing the sovereignty and interests of the borrower required a flexible and creative approach to find the right solution. We are extremely proud to have supported the lenders in successfully completing this first-of-its kind financing” said Mr. Liu.
