Sayenko Kharenko has advised OPIC, Merrill Lynch, and Pierce, Fenner & Smith Incorporated on USD 250 million financing for Ukraine's "Energoatom" National Nuclear Energy Generating Company for the construction of a nuclear fuel storage facility.
An SPV organized as a Delaware statutory trust acted as issuer of the notes and lender to Energoatom. The loan benefits from a sovereign guarantee issued by Ukraine, and political risk-insurance provided by Overseas Private Investment Corporation (OPIC), the US Government’s development finance institution. Because of the enhancements embedded in the structure, the notes achieved an Aa2 credit rating from Moody’s and one of the lowest interest rates ever for a Ukrainian borrower.
According to an OPIC press release, the loan will help to finance the construction of a long-term fuel storage facility in the Chernobyl Exclusion Zone, and will provide Ukraine an alternative to its current practice of shipping spent fuel to Russia. According to OPIC, "in addition to advancing a major energy security project in a region critical to American foreign policy, this project marks a milestone in an innovative use of political risk insurance to help developing countries access the capital markets to finance major infrastructure projects."
“This project will help transform the energy landscape in Ukraine, and reflects OPIC’s ongoing commitment to innovating its products to address the needs of our clients,” said Ray Washburne, OPIC President and CEO. “By helping Ukraine raise money in the capital markets, OPIC is addressing one of the major hurdles that often prevents developing countries from raising sufficient financing for critical infrastructure projects.”
When completed, the storage facility will have the capacity to store 169,000 tons of spent fuel per year, which should result in substantial annual savings for the energy sector of Ukraine.
The Sayenko Kharenko team was led by Partner Nazar Chernyavsky, who commented: "We are very pleased to contribute to this landmark deal, which is supported by the Governments of both Ukraine and the United States, and brings Ukraine closer to ensuring its energy independence." Chernyavsky's team included Sayenko Kharenko Counsel Olexander Olshansky, Associate Dmytro Vasylyna, and Junior Associates Denys Nakonechnyi, Vira Pankiv, and Oles Trachuk.
Editor's Note: After this article was published, CEE Legal Matters learned that Avellum had advised the Ministry of Finance of Ukraine on the loan, with Baker McKenzie advising Energoatom, published here.