Mazghouny & Co advises Scatec on the issuance of USD 334.5 million green bonds to refinance its 6 Benban projects

Scatec green bond issue

Mazghouny & Co is very pleased to have assisted Scatec with the refinancing of the non-recourse project debt for 6 solar power plants in Benban, Egypt, with a total capacity of 380 MW, through the issuance of 19-year USD 334.5 million non-recourse Green Project Bonds, which benefit from a Climate Bond certificate from the Climate Bond Initiative.

This innovative climate finance transaction is the first of its kind in Africa and has been distributed to a consortium of development finance institutions, comprising the European Bank for Reconstruction and Development (EBRD), the US International Development Finance Corporation (DFC), the Dutch entrepreneurial development bank FMO and German Investment Corporation DEG, alongside international private institutional investors.

A USD 30 million Credit Enhancement Facility (CEF) provided by EBRD for participating institutional investors, alongside the Multilateral Investment Guarantee Agency (MIGA) Political Risk Insurance cover, is an innovative instrument, which has drawn a new class of international institutional investors into Egypt’s renewable energy sector. Mitsubishi UFJ Financial Group acted as arranger for the bond issue.

The refinancing is expected to provide increased leverage, extended tenure, and reduced interest costs, improving the sponsors’ future distributions from the power plants.

The transaction team from Mazghouny & Co was led by Managing Partner Donia El-Mazghouny, and Associate Khadiga Abou-Zeid handled the local security work, with support from Senior Counsel Ahmed Mostafa and Associate Yehia Zakaria. The firm has generally liaised the legal stream from Scatec’s side, and has particularly supported with all documents local law review and negotiation with the refinancing parties and Egyptian stakeholders, the interface with the Egyptian authorities and security agent, as well as with the original financing partners being pre-paid as part of the transaction.