IFLR 1000
The Guide to the World's Leading Financial Law Firms

Hong Kong serves as an important base for international firms working with financial partners and corporations investing into mainland China, but much of the regional work for other Southeast Asian jurisdictions is also done by Hong Kong partners or in conjunction with Hong Kong partners, as many of the major investment banks have large hubs in the city. As far as activity in the market goes, one partner puts it this way: "If someone tells you that project finance really has a lot going on in Asia, they're probably taking the mickey or talking themselves up. It's not a big market, but there is some activity going on-there are a few major projects in India, and Vietnam, Thailand and Indonesia are also active in project financings. Still, the work available has been thin after the Lehman collapse."

Banks in jurisdictions like Thailand have also had a changing role in the regional project finance space, and much of the advising for international banks involved in this work is done out of Hong Kong. For example, Thailand's very liquid national banks have recently solely financed a huge power project in Lao PDR, representing one of the first times in the region's history that local banks rather than international banks have taken the lead on these massive investments.

In and of itself, prospects for financings within Hong Kong are limited-which is perhaps not surprising since Hong Kong's infrastructure is highly developed and most of this year's power projects have been investments into power facilities for developing countries. However, there are some key mandates like the Guangdong-Shenzhen-Hong Kong express rail link that are advised on by firms with strong ties to the Hong Kong government and developers. Theme parks and cultural venues are also a main area of project financing for the SAR.

As the Chinese economy continues to develop, it is likely that there will be more opportunities for foreign and regional investors to be a part of energy and infrastructures. If that happens, Hong Kong is likely to play a key role as a go-between for international financial entities who want to get a piece of China's project finance market.

Allen & Overy's project finance team benefits from its top relationships with Chinese and international banks, as well as its expanding regional presence. The firm also has strong experience working on increasingly influential export credit facilities.

This year, Allen & Overy has shown an increased presence in Australia-related project financings due to the recent openings of its Sydney and Perth offices. Partner Matthias Voss recently led Allen & Overy's team in advising an energy company and sponsors on a LNG (liquefied natural gas) joint venture project to be developed in Queensland. The LNG financing is novel in the Australian market because it combines equal investments by western oil company Shell and China's Petrochina. The financing is also one of the largest of its kind around the world.

The firm's strong relationships with Chinese financial institutions has also allowed the Allen & Overy to advise on a variety of projects sponsored by Chinese financiers. As an example, the team recently advised China Export and Credit Insurance Corporation (Sinosure) on the landmark Sasan power project in India.

In 2010, the team also advised Sithe on GN Power Mariveles, in a deal which marks the first time the region has seen a Chinese financed non-Chinese sponsored IPP (independent power production) project outside the of the country's borders.

Baker & McKenzie's project finance practice has continued to develop these past years, and this year was no exception. Baker & McKenzie's Hong Kong-based project finance practice stands out among its peers for its involvement in major projects within Hong Kong itself. While many firms simply use Hong Kong as a base for their lawyers acting on regional projects, Baker has a focus on domestic projects on the island itself.

Among these was the firm's representation of the West Kowloon Cultural District Authority, led by David Smith, on all matters in connection with or arising from the establishment, development and operation of the West Kowloon Cultural District (WKCD). As the WKCD Authority Ordinance was enacted by the Legislative Council on July 11 2008, the Legislative Council also approved an upfront endowment of HK$21.6 billion ($2.77 billion) for the Authority to develop the project.

Smith also led Baker's team in advising the Hong Kong public transit MTR corporation in relation to its planning and design for the Hong Kong section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link. The 142 km high-speed rail link will run from Shibi in Guangzhou to the West Kowloon Terminus in Hong Kong and will connect to the new high-speed national rail network now being developed by China, including the Beijing-Guangzhou and Hangzhou-Fuzhou-Shenzhen Passenger lines.

Clifford Chance's Hong Kong team supports the Beijing-based project finance practice in their China-related work, and also facilitates project finance throughout Southeast Asia via the firm's relationships with major Chinese lenders. Veteran project finance partner Huw Jenkins leads CC's Hong Kong team.

The project finance team recently advised Sinosure in providing its export credit guarantee for financing the Sasan power project in India. Bank of China, China Development Bank, the Export-Import Bank of China and Standard Chartered bank are all acting as lenders for borrower Reliance Infra Projects (UK). The financing was particularly important in regional project history because it represented the first time that an Indian UMPP has been backed by Mainland banks and guaranteed by Sinosure.

Clifford Chance's project finance partners also acted as international counsel to borrower CLP holdings in connection with the $288 million financing of its Jhajjar Power Project in India. The northern Indian Jhajjar project is one of the first projects in a decade to be financed by overseas lenders, which included China Development Bank, The Export-Import Bank of China, HSBC, Standard Chartered and The Bank of Tokyo-Mitsubishi UFJ.

Herbert Smith's strong presence in the energy sector helps to support the firm's strong showing in regional project finance. The firm's project finance team can boast expertise in financing projects led by international banks across Southeast Asia, and also in helping Chinese financial institutions invest in outbound project work.

"We are deeply satisfied and impressed by the extent of the knowledge of the firm as regards all questions raised—not only do they perfectly master the general regulations and laws of China but they precisely know the history of the project, which is of a great help for us."

In one of the firm's largest project finance deals this year, partners Anna Howell and Hilary Lau also advised Kangean Energy Indonesia (KEI) on a ten year, $875 million contract with BW Offshore for a floating production unit (FPU) in Indonesia. Kangean Energy plans to extract the first gas in 2012.

Latham & Watkins' Hong Kong-based project finance team has a significant presence in major project financings across the Asia Pacific region, with a wide range of historical involvement across many jurisdictions. The team has particular depth and acumen in the oil & gas, mining, and infrastructure sectors. Partners Joe Bevash and Stephen McWilliams lead the team which advises on projects across Southeast Asia.

This past year, Latham & Watkins team has received several major, high-profile mandates for projects in Lao PDR. One saw the team act for the lenders on the Hongsa Mine-Mouth Power project in Xayaboury. This included the construction of a 1.878MW power plant with three lignite-fired power generation units. The deal was notable as it was the largest project financing undertaken solely by Thai banks.

The Latham team is also currently advising project company Jurong Aromatics in connection with the development and financing of its petrochemicals project. Financing for the $2.63 billion project involves a mind-boggling 11 bank lenders and eight sponsors, who are international as well as Korean, Singaporean and Japanese-based entities.

Linklaters has a top presence in market-leading project financings in China due to strong partner expertise across numerous project sectors. The project finance practice is especially strong on infrastructure deals, as shown by the firm's strong history of mandates in this aspect.

This past year, Linklaters has enhanced its Greater China offering with the relocation of partner James Douglas to Beijing. The firm has solid experience specifically advising domestic Chinese banks on projects.

In one example the team advised lenders China Development Bank, China Exim Bank, Standard Chartered, HSBC and BTMU on a $288 million financing for Jhajjar Power for their 1320MW India power project. The project is China Development Bank's first limited recourse project financing within India and will be built as a greenfield project, only the second time in ten years that such a project, built on effectively virgin soil, has been undertaken in the country

Linklaters also received several other major mandates from China Development Bank also called in the firm to assist it alongside Standard Chartered on a $1 billion facility for Angolan Sonagol finance. As a frequent advisor also to Sonagol, the firm demonstrated its ability to negotiate and guide two familiar clients to agreement.

The Linklaters team also advised on the seminal Baha Mar project financing, which represented the first time that a limited recourse financing was wholly provided by Chinese lenders.

Peers in the market have overwhelmingly advocated that Milbank be moved up in the rankings and the mandates the firm has received back up this viewpoint. As a partner at a rival firm tells us, "Milbank really has a strong regional presence in project finance. They need to be included in any serious ranking of project finance in Asia."

Milbank has a large regional team with deep experience and the practice represents a wide array of project finance players including underwriters, lenders, project joint ventures, sponsors, contractors, government agencies and multilateral institutions. The firm has a presence in Hong Kong as well as a large number of partners in Singapore and Tokyo who led the regional project finance practice.

Milbank is also able to advise clients on the related areas of restructuring, portfolio securitisation, credit enhancement and political risk mitigation as part of its global expertise.

Clients are positive about Norton Rose's project finance abilities. As one client tells us, "They're a strong team. We use them for natural resources and structured finance projects and cross border finance transactions, and the partners are adaptive to our needs. Our relationship also goes beyond just completing deals, we do regular joint presentations to clients with them and often catch up on market intelligence." The same client also had high praise for the firm's regional network. "Their network is very, very good," he says, "the most effective that I've seen. I rate them highly for regional connectivity."

Norton Rose's project finance team has also seen the growing trend for Chinese banks to finance major projects across the region, and has thus far been able to take advantage of this growing market development. The firm has been a player in both inbound and outbound energy and resource projects financing relating to the China and Hong Kong.

A major client is China Development Bank (CDB) who the firm advised on solar projects in Italy this year. Inbound work has also been dominated by renewable energy mandates.

CDB also called in the team to advise on a $75 million facility for VLCC for the rebuilding of Cardiff Marine, with the deal signed off at an international summit between Greece and China in Athens. More work for CDB followed when the firm acted for them and Export and Import Bank of China on a $500 million financing for the Spinifex Ridge Molybdenum/Copper mine in Australia

Another key mandate last year saw the team act for Chongqing Jiangbeizui CBC Real Estate Company (JCBC) in regard to the Chongqing International Financial Centre Project. JCBC is a potential acquisition target for Silverstein and therefore the firm had to advise the former over how to take forward the debt and equity financing of the Chongqing Centre.

Shearman & Sterling has a strong presence in project finance work in Asia, and has been growing its presence in advising domestic Chinese banks.

The Middle East and Oman in particular has been a focus for the firm recently with the team advising on two major infrastructure projects. In one the team acted for the lead arrangers including Societe General, Bank of China, ICBC in SembCorp Utilities' bid for the development of a gas-fired 1500MW Sur IPP (independent power production) plant valued at $1.8 billion. Shearman & Sterling's partners in Hong Kong, London and Singapore formed a multi-jurisdictional team that advised on the project.

Shanghai managing partner Andrew Ruff also led the Shearman team advising Sinosure, China Development Bank and Bank of China on the financing of the Salalah IWPP (Independent Water & Power Production) natural gas and fuel-oil fired generating plant.

The latter project marks the first time that a Chinese institution has provided a larger ratio of foreign to domestic currency for the funding for a project in the Middle East. With its strength in the region Shearman will no doubt be hoping that more Chinese investment will follow.

Skadden's project finance practice is led by well-respected partner Alan Schiffman in Hong Kong, with the firm's Singapore team partnering in advising on project financings across Southeast Asia. Clients praise Schiffman, saying that his work is "superior and all that we could have asked for."

Another client praises Schiffman's abilities in working with Chinese partners on projects. "He understands the key terms and key requirements for international companies like us," says the client, "and he understands local Chinese markets and can bridge the gap. We are working with Chinese construction and Chinese banks and he's been able to work with them on the educational process and has been good at explaining situations to the local entities." The same client also has praise for the general nature of Skadden's offices and people, saying that "It's a pleasure working with them, including their associates. What sets them apart is not just the quality of the partners but their associates as well. I think they've done everything we really wanted."

Schiffman is currently representing the world's second-largest power generation company China Huaneng on its acquisition of a 50% in InterGen.

Skadden's team seems to have a particular foothold in project financings, specifically IPPs (independent power production) in Indonesia's growing market. The project finance team recently advised an international consortium of investors on the preparation of its bid for the up to 2000MW Central Java IPP project with an estimated project cost of $4 billion. The team served as counsel to a major international IPP company on the preparation of its bid for a mine-mouth project in excess of 500MW located in Indonesia, and advised a major international company in assessing the acquisition of a majority interest in another 200MW IPP project

Skadden's team also advised PT Pation Energy in connection with the financing of an 815MW coal-fired power plant in the country. The project is an expansion of an existing plant that is owned already owned by the project company, and the expansion is estimated to cost $1.5 billion. Japan Bank for International Cooperation is set to provide 60% of the financing, with the rest provided by a syndicate of commercial banks. Sponsors are raising $1.2 billion in 18 year term dollar and yen facilities.

Orrick Herrington & Sutcliffe's Hong Kong and Greater China project finance team is involved in many inbound and outbound China-related projects, including power generation, distribution and infrastructure projects across Greater China and Southeast Asia. The firm is presently involved in nearly all of the active projects in Vietnam.

Recently, Orrick advised Thang Long Thermoelectric JSC (Thang Long) in its role as investor and sole developer of an Engineering, Procurement and Construction (EPC) contract with Wuhan Kaidi Electric Power which was valued at $645 million. The project represented the first time a coal-fired thermal power project has been undertaken by a Chinese contract of and privately-owned Vietnamese power generation company.

Orrick's team has also represented JAKS Resources Berhad of Malaysia in the development of a $2 billion power project in Vietnam's Hai Duong province. The project represents the largest cross-border power project between Malaysia, China and Vietnam in the history of the three countries.

Paul Hastings' project finance group has experience in the structuring and development of energy assets and energy financing and execution. The project finance practice has a broad scope across the Asia Pacific region and its strong relationships with Korean companies and sponsors are a particular an asset to the firm, allowing Paul Hastings to advise Korean banks on regional project financing investments. The firm also boasts a worldwide and regional specialisation in coal-fired power projects.

One client tells us that, "Paul Hastings has a strong knowledge in the energy sector in Southeast Asia and has a lot of experience dealing with energy projects in Asia. Because of this, they are able to provide valuable and practical legal advice to their clients, including our company. Their lawyers think outside of the box and recommend innovative structuring solutions."

Recently, partner Joseph Kim led Paul Hastings' team in advising Korea East-West Power Co. (EWP) in its acquisition of Marubeni Sustainable Energy. Marubeni Sustainable energy is a top US integrated energy company that focuses on renewable energy and is based out of San Diego, California. The deal represents one of the most successful instances of a South Korean company making an acquisition into the US power industry. The deal was especially challenging because it involved multiple power plants in multiple jurisdictions as well as complex regulatory and due diligence matters.

Freshfields Bruckhaus Deringer's team globally strong network of lenders gives the Hong Kong team a comparative advantage in some important project finance deals across the Asia pacific region. Freshfiels' Hong Kong team has particularly strong relationships with project finance entities in Vietnam, and has been involved in some of the country's most important power projects this year.

In one Vietnam-based project, Freshfields' team recently represented developer AES in connection with the EPC contracts for the $1.5bn Mong Duong 2 coal-fired power project in Quang Ninh province, Vietnam. The Freshfields project finance group is also an ongoing advisor to intercreditor agent Credit Agricole on another Vietnam-based enterprise, the Phu My 3 power project.

Mayer Brown JSM's strong China law capabilities allow them to meet the growing demand for advising on the inbound and outbound project work done by major Chinese financial players across the region. This gives them a special niche in a budding practice area. For example, Mayer Brown JSM's team recently advised China Development Bank in connection with $78 million and $45.3 million term loan facilities to Tianjin Julong Jiahua Investment Group and Tianjin Bangzhu Trading for 22,000 hectare palm plantation projects in Indonesia.

Banking practitioner Alastair MacAulay also lends his expertise in asset finance to the strength of the practice. Mayer Brown JSM also has significant project work across Southeast Asia, including work with Korean, Vietnamese and Indonesian entities.