LNG terminal financing – information workshops for the banks

Photo of the article On 7 September 2009 Gas Transmission Operator GAZ-SYSTEM S.A. in co-operation with PKO BP organised information workshops for banks interested in participating in the consortium to finance the construction of the liquefied natural gas terminal in Świnoujście.
The meeting was attended by representatives of 13 major banks, including Pekao S.A., Societe Generale, BRE Bank S.A., Bank Handlowy, BGK, BNP Paribas, Caylon, Deutsche Bank, ING, The Bank of Tokyo Mitsubishi UFJ Ltd and West LB.
During the meeting, the progress of the LNG terminal construction was presented along with the technical assumptions behind the project, the method of project organisation and management, and the method of project financing.
The meeting was another element of the process of arranging the LNG terminal financing, co-ordinated by GAZ-SYSTEM S.A. On 21 August 2009, an agreement was signed with PKO BP S.A. to arrange financing for the LNG terminal construction project in Świnoujście. PKO BP was appointed the arranging co-ordinator for the first stage of consortium financing by the commercial banks. Bank PKO BP will select the main partner and several consortium members.
When all the consortium members are selected and the role of individual banks is determined, the consortium will continue the works on preparation of the mandate letter. The letter will be binding for the consortium members and is scheduled for execution by the end of this year. The agreements will be signed and the project financing process closed in Q1 2010, before the general contractor for the project is appointed.
It is planned that approx. 30% of the project value will be financed with own funds of GAZ-SYSTEM S.A. to be contributed to Polskie LNG (a subsidiary of GAZ-SYSTEM responsible for the construction of the LNG terminal) by raising of the share capital. The remaining funds will be sourced from international financial institutions (EIB and EBRD) and commercial banks, which will become consortium members. It is also planned that EU funds will be acquired (as part of the so-called recovery plan).
GAZ-SYSTEM S.A. does not rule out financing of the LNG terminal construction with the participation of the Export Credit Insurance Agency and the Investment General Contractor if conditions of such financing prove attractive.