Norinco International Co-operation, a Chinese state-owned construction company, made a US$71 million acquisition of rights to build and operate a 156MW wind power project in the Adria coastal area of central Croatia.
Norton Rose Fulbright advised Norinco in the transaction. “There are always going to be challenges when you have a large Chinese company partnering with a strong local private company in a major piece of infrastructure in Central Europe,” Tom Luckock, the law firm’s partner in Beijing and lead partner for the project, told Asia Business Law Journal. “On balance, though, these were overcome reasonably quickly and easily.”
By investing in this project, Norinco is positioning itself for expansion in both the energy and European markets. “This deal is a fine representation of the activities driven by the Belt and Road initiative, and is only one out of a very robust pipeline of deals,” said Luckock.
Located along the coast of the Adriatic Sea in central Croatia, the wind farm covers an area of 44.8 square kilometres. Its equipment includes 394MW wind turbines, which are expected to generate 530 million kilowatt-hours of electricity per year.
The project was large and had good wind resources with an attractive potential tariff, said Luckock. “As with all large wind projects there were land issues that needed to be sorted out, and the project of course will need to go out for finance later in the year.”