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New Silk Road Finance Awards

Southeast Asia: Best Bank for Infrastructure/Project Finance in the Region 2017

HSBC

In southeast Asia, where economic growth varies widely from country to country, infrastructure development is especially uneven. The need for roads, railways and sustainable energy to support growth and investment is undeniable, with current services in some countries crumbling under the pressure.

In Indonesia, the lack of reliable and sustainable energy has been holding the country back. But this is set to change with the creation of a new 2,000-megawatt coal-fired power station in Banten Province.

HSBC, whose Greater China chief executive is Helen Wong, acted as transaction adviser to Indonesia’s state-owned electric utility company for the power station, which is being developed by China Shenhua Energy Company Limited.

The successful deal, worth $1.8 billion, illustrates HSBC’s strength in project finance and earns it the award for best bank for Belt and Road-related infrastructure finance in southeast Asia.

HSBC supported the Indonesian government to get the deal completed in a timely manner, taking 16 months from the request for proposal in May 2015 to financing in September 2016. Moreover, this was the largest independent power producer project to have achieved financing to date without any form of guarantee or support from the government of Indonesia.

Jawa 7, as the power project is called, is the largest China-led project to date in Indonesia. The deal highlights China’s support of Indonesia and is central to the Indonesian government’s ambitious programme to increase power generation capacity to 35,000MW by 2019.

Upon completion, Jawa 7 will add power capacity to the Java-Bali region and further strengthen the regional power grid system. The new plant will not only support domestic energy demands, but will also go a long way to sustain the large flows of Chinese investment destined for the country as China’s Belt and Road Initiative takes off.

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