Hungarian Energy (2000)

Aon’s London based speciality and reinsurance businesses were combined under the name of Aon Group Limited on 1st July 1997. Aon Group Limited provides enhanced insurance & risk management services at all levels, including a powerful marketing capability on behalf of a global range of clients who represent many of the world’s largest and most complex risks. The company employs over 4,000 people, generating revenues of over US$ 550 million.

Aon’s aim is to grow naturally or by acquisition where appropriate, but also to use its global leverage as a broker to offer an increasingly varied range of products and services to its clients. Aon’s aims to provide increasingly sophisticated solutions to clients’ risk management and insurance requirements. It seeks to use its broking expertise and knowledge in the global insurance markets, to ensure these solutions remain the most competitive available.

Clifford Chance is a leading international law firm with over 3000 lawyers in 29 commercial and financial centres around the world. The firm provides comprehensive advice on a wide range of corporate, commercial and banking matters in respect of both domestic and international transactions.

Through our offices in Budapest, Prague and Warsaw we advise on all aspects of business and finance in the fast developing markets of Central Europe.

Our offices in the region are staffed with highly qualified lawyers and are fully suported by the resources and expertise of the other offices worldwide.

Clifford Chance has extensive expertise in acting as legal advisers to participants in the energy sector. The lawyers of Clifford Chance regularly deal with all aspects of regulatory issues as a basis for structuring transactions including the preparation and negotiation of construction and power purchase agreements and other project documents, conducting due diligence and the structuring and negotiation of the financing and security packages.

Our Central European offices have:

• a specialist knowledge of regulatory issues, including comprehensive skills and understanding of the domestic and international power market, gained from our experience in action on a number of projects in Central Europe;
• an excellent reputation with the major players on the energy market, gained through involvement in major projects in this sector on behalf of many parties to such projects;
• an established and committed presence with the depth of resources to support long and complex negotiations and documentation;
• the ability to dedicate a team to each project comprising qualified lawyers with local and international language capabilities.

Our Budapest office has:

• a dedicated Energy Group with a specialist knowledge of regulatory issues, including a strong understanding of the domestic and international power markets having worked on a number of prestigeous projects in Hungary and Central Europe.

Working with Powergen

PowerGen is a leading international power company, based in the UK. In addition to its UK gas and electricity business, it has interests in some 8,000 MW of plant across Europe, India and the Pacific Rim. In June 1995, PowerGen became the first investor in the Hungarian power sector when it acquired Csepel Eromu Rt., the owner and operator of a power station on Csepel Island, Budapest.

Following this acquisition, PowerGen decided to construct a new 389MW combined cycle gas-fired power station next to the existing plant and established a special purpose company, Csepeli Áramtermelo Rt. to own, construct and operate the new power station, which will be called Csepel II.

The new power station, which will go into commercial operation in November 2000, will be capable of providing 6-7% of Hungary's total electricity demand as well as the heating requirements of 16,000 homes and offices in nearby districts.

Csepel II is ‘project financed’, that is, the money for the construction of the power station is predominantly provided by long term loans from a syndication of international banks.