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Kinstellar and Karanovic & Nikolic Advise on Financing of Serbia’s Largest Wind Farm

Kinstellar and Karanovic & Nikolic Advise on Financing of Serbia’s Largest Wind Farm

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The Maric i Mujezinovc law office in cooperation with Kinstellar provided local advice to Vetroelektrane Balkana in relation to the EUR 300 million financing of the largest wind farm project in Serbia. The lenders were advised by Karanovic & Nikolic and Norton Rose Fulbright.

The developer, Vetroelektrane Balkana, is owned by Tesla Wind – a joint venture between Masdar, a renewable-energy company based in Abu Dhabi – and Cibuk Wind Holding, a subsidiary of the US-based wind-energy developer Continental Wind Partners.

The lenders include EBRD, and the International Finance Corporation, which are joined by B-lenders including Banca Intesa, Erste Bank, UniCredit, and The Green for Growth Fund.

The EUR 215 million financing is divided equally between the EBRD and the IFC. The EBRD is providing a EUR 107.7 million syndicated loan, EUR 55 million of which is syndicated to B lenders. The IFC, a member of the World Bank Group, is providing EUR 107.7 million through its Managed Co-Lending Portfolio Program and partially through syndicated B loans.

The Cibuk 1 wind farm, which has a 158 MW capacity, is the largest wind farm project to date in Serbia and the Western Balkans. The wind farm will be located in the area belonging to Kovin municipality, and will possess 57 wind turbines, supplied by GE Renewable Energy. The wind farm will consist of 57 GE wind turbines and will cover an area of approximately 40 square kilometers. Cibuk 1 is expected to provide electricity to 113 thousand households and reduce carbon emissions by more than 370,000 tones.

According to estimates, the plant will be connected to the grid in the first half of 2019. The construction of Cibuk 1 is expected to create 400 jobs in the area, and Kinstellar reports that it will "improve the local infrastructure by providing for 50 kilometers of roads." The project should help Serbia meet its commitment to having 27% of its gross energy consumption coming from renewable energy sources by 2020.

The Kinstellar team was led by Partners Branislav Maric and Selma Mujezinovic and included Senior Associate Tijana Arsenijevic and Associate Tamara Zejak. A number of other members of Kinstellar's local and regional teams assisted throughout the duration of the project, including Budapest-based Partner Kristof Ferenczi and Managing Associate Balazs Sepsey and Belgrade-based Managing Associate Dragana Bajic, Senior Associate Andreja Vrazalic, and Trainee Una Draganic.

Karanovic & Nikolic acted as the local counsel for EBRD and IFC, and advised on all local law aspects of the financing, including the preparation of due diligence, support in the negotiations of the facility agreement, and other financing and project documents. The firm's team was led by Partners Maja Jovancevic Setka and Petar Mitrovic and included, among others, Partner Katarina Guduric, Senior Associate Ana Lukovic, and Associates Marija Vicic and Aleksandar Sukiban.

Norton Rose Fulbright did not reply to our inquiries.

Editor's Note: After this article was published Karanovic & Partners reported that Cibuk 1, the largest wind farm in the Western Balkans, had officially started operations on October 11, 2019.