Ashurst has advised JBIC and a group of commercial lenders comprising SMBC, Mizuho, Bangkok Bank, OCBC and BTMU as common counsel in relation to the US$622 million financing of the 920 MW gas fired combined cycle power project developed by Khanom Electricity Generating Company Limited ("KEGCO").

KEGCO is a subsidiary of Thailand's first independent power producer, Electricity Generating Public Company Ltd. The power plant, located in the Nakhon Sri Thammarat Province, Thailand,  is expected to be operational by June 2016 and will supply electricity under a 25-year power purchase agreement with the Electricity Generating Authority of Thailand ("EGAT").

The project is particularly notable as the new power plant is scheduled to enter into operation in June 2016, at the same time as the existing KN2 and KN3 power plants owned and operated by KEGCO at the same site are scheduled to end their operational life. The KN2 and KN3 plants comprise 749 MW and supply their electricity to EGAT under an existing power purchase agreement. The financing of the project therefore had to take into account the fact that KEGCO, as borrower, will continue to operate these existing plants at the same time as the new power plant is being constructed.

The cross-office Ashurst team advising the lenders was led by partners John McClenahan, Harvey Weaver (both Tokyo) and Matthew Bubb (Singapore), with partner Christopher Whiteley (Hong Kong) advising on hedging arrangements. The team also comprised Counsel Matthew Rickards (Tokyo), senior associates Shan Koh and Alice Straub (both Tokyo), Anna Hermelin and Andrew Smith (both Singapore), and associates Crystal Wang (Hong Kong), David McCormick and Glen McAskill (both Tokyo).

John McClenahan commented:

"We are delighted to have advised JBIC and the commercial lenders on this landmark project for the Thai power industry. There is great pressure in Thailand to increase power output to meet rapidly growing demand and this was reflected in the challenging timetable set for financial close. The project is also ground-breaking in that it is the first IPP to adopt the new EGAT 2012 model form power purchase agreement and involved the construction of a new power plant alongside other operating plants of the borrower, creating some interesting challenges for the financing structure."

Chandler and Thong-ek acted as Thai counsel to the lenders while Baker & McKenzie advised KEGCO as borrower.