CIC Energy, the promoter of the Mmamabula Export Energy project in Botswana, last week announced that it had appointed a London based investment bank as its financial advisors for the envisaged power plant.
NM Rothschild and Sons (UK) will be project financial advisors as the CIC Energy moves to close a deal with Engineering, Procurement and Construction (EPC) contractor that will pave way for the development of the project.
The President of CIC Energy Greg Kinross said that financing of the project will begin soon.
“Following extensive groundwork by the company over the last eighteen months, the financing process for the Mmamabula Energy Project is about to begin in earnest and the appointment of NM Rothschild and Sons will provide leadership over the months ahead as we negotiate and finalise terms and conditions with lenders,” Kinross said .
NM Rothschild and Sons will be involved in all aspects of the project finance process, including participating in term sheet and loan documentation negotiations.
It will also coordinate and manage the lender group and the financing process in order to meet the Mmamabula Energy Project’s timelines.
A fortnight ago the promoters said that negotiations with a possible EPC contractor in Asia were advanced and an outcome will be known before the end of 2008.
“CIC Energy’s negotiations with a select group of Asian EPC contractors are ongoing and are expected to be concluded before the end of 2008 with the announcement of a preferred contractor,” Sabina Srubiski of Tau Capital Corp told Sunday Standard.
Kinross added that the expected lending group includes development of finance institutions with a mandate to fund projects like the Mmamabula Energy Project, which are compliant with the Equator Principles and have a high socio-economic development impact in the region.
The Equator Principles are guidelines based on environmental and social standards of the International Finance Corporation, the private sector arm of the World Bank Group.
It is also anticipated that certain export credit agencies will be participating in the funding in support of the export of goods and services from their host countries for the construction of the Mmamabula Energy Project. ┬á
A large segment of funding being targeted is from an export credit agency from the source country of the lead engineering, procurement and construction contractor that CIC Energy is in an advanced stage of negotiations with for the Mmamabula Energy Project power station, Kinross added.
The financing plan is expected to be completed by a tranche of funding from South African commercial banks, with whom discussions are also ongoing.
N M Rothschild & Sons is a global firm with over 40 offices around the world. The firm acts as a financial advisor to companies, largest governments, and wealthiest families in the world.