Vista Ridge Project is one of the largest public-private partnerships to close in the US water sector
Los Angeles, CA /PRNewswire/ - Milbank, Tweed, Hadley & McCloy LLP has advised the lenders, a group of banks led by Sumitomo Mitsui Banking Corp., in the financing of the roughly $923 million Vista Ridge Regional Water Supply Project, a well field and water pipeline that is expected to provide 20% more water to the City of San Antonio, Texas.
The water supply project, being built by Garney Construction, will consist of the production, treatment, delivery and sale to San Antonio Water System (SAWS), the city's public water utility, of up to 50,000 acre-feet of potable water each year for 30 years. Fresh water will be pumped from wells in the Carrizo-Wilcox aquifer to a collection pipeline system in Burleson County, Texas, where the collected water will be treated. From there, the water will be pumped through a new underground pipeline over 140 miles to north Bexar County, Texas, where it will connect to SAWS' municipal water utility system. All costs of construction and right-of-way acquisition are being covered by privately raised debt and equity capital. No public funds are needed from the City to build the project. SAWS will pay only for water that is actually delivered and for certain associated operating and maintenance expenses once the project has been built and is operating. The developer of the project, Vista Ridge LLC, takes the risk of water supplies and permits.
"Water has become the new oil," said Mr. Marks. "With climate change and increased urbanization globally, clean drinking water will become a more scarce commodity. It is critical that communities get ahead of this challenge by finding more environmentally sustainable water supplies, by conserving to reduce per capita water use, and by adapting to recycled water where possible. The Vista Ridge pipeline project offers a new, safe and dependable fresh water source for San Antonio – reducing the City's reliance on the environmentally sensitive Edwards Aquifer while maintaining the City's water conservation policies."
Mr. Marks added: "This innovative project represents one of the largest public-private partnerships in the water sector in the United States. The transaction is an example of how shifting risk from the public to the private sector in financing, building and operating critical infrastructure benefits both the community and investors."
In addition to Mr. Marks, Milbank attorneys involved in the Vista Ridge transaction include Project Finance special counsel Jeff Cohenand associates Jeeseon Ahn, Francis Choi, Miguel Duran, Hao Huang, Eusebius Luk and Tom Quirxtner; Environmental Group partner Matthew Ahrens and associate Meghan Gabriel; Tax special counsel Drew Batkin; and Alternative Investments partner Eric Moser and associates Melissa Ferraro and Carl Ruggiero.
Engineering and design have already commenced, and major construction will start in January 2017. "Using a fixed price, design-build approach to construction allows for accelerated project delivery and budgetary certainty," added Allan Marks. The Vista Ridge Project is expected to begin operation in 2020. After the first 30 years of operation, ownership of the pipeline will be transferred to the San Antonio Water System.
Milbank, Tweed, Hadley & McCloy LLP is a leading international law firm that provides innovative legal services to clients around the world. Founded in New York 150 years ago, Milbank has offices in Beijing, Frankfurt, Hong Kong, London, Los Angeles, Munich, São Paulo, Seoul, Singapore, Tokyo and Washington, DC. Milbank's lawyers collaborate across practices and offices to help the world's leading commercial, financial and industrial enterprises, as well as institutions, individuals and governments, achieve their strategic objectives. For more information about Milbank, please visit www.milbank.com.
SOURCE: Milbank, Tweed, Hadley & McCloy LLPCopyright 2016 PR Newswire. All Rights Reserved