China's Belt and Road vision is an ambitious plan to build out infrastructure along the ancient Silk Road trading route. It is designed to improve trade and investment across Eurasia. The scale of the project is impressive, passing through more than 65 countries across Asia, Europe, Middle East and Africa. Bringing projects to fruition would require advisors with the ambition and ingenuity to match.
In one of the first projects to be funded under the Belt and Road initiative, Pinsent Masons was appointed as lead advisor to the two project companies on the simultaneous development of:
Our stakeholders included:
This deal carried a deeper political significance, highlighting:
A step change in Pakistani energy policy to address a dire shortage of energy and reduce dependence on imports.
The Chinese infrastructure community recognises Pinsent Masons as a firm with an innovative and truly international approach to dealmaking.
This was CMEC’s first major overseas investment project. We supported the client in engaging with unfamiliar legal issues and structures, and using its global project financing experience to help frame strategy in a broader commercial and political context.
To achieve this, we brought together a team of infrastructure finance experts from across the firm's Beijing, Hong Kong, Singapore and Dubai teams.
We recognised at the outset that this required a team with:
Sophisticated Chinese contractors eschewed traditional government-led lending in favour of more lucrative equity structures. This project was predicated on a 'contractor plus investment' model which offers enhanced financial rewards to contractors. It also gave greater control over projects with a seat at the table during the negotiation of crucial project contracts.
The project involved two financings, power financing of US$821m and mine of US$700m. This comprised a combination of Chinese credit from Sinosure with additional conventional and Islamic Pakistan rupee tranches.
This model has not, to our knowledge, been deployed in a project of this type or scale before.
Successfully reaching financial close on this deal represented a major milestone in what has been a lengthy assignment. The project represents a greater-than-usual set of “firsts”. It was the
The Chinese infrastructure community recognises Pinsent Masons as a firm with an innovative and truly international approach to dealmaking. We have also earned a reputation as the 'go to' firm for further Belt and Road projects.