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Zhong Lun Assists SPIC and BASF in Entering into a 25-Year Green Power Purchase Agreement
Zhong Lun Assists SPIC and BASF in Entering into a 25-Year Green Power Purchase Agreement
State Power Investment Corporation (“SPIC") and BASF signed a 25-year green power purchase agreement in Munich, Germany on September 7, 2023. As of the time when the steam cracking units and their cores of BASF Zhanjiang Integrated Base are put into operation in 2025, SPIC will supply BASF Zhanjiang Integrated Base with no less than one billion kwh of renewable electricity each year, mainly from the offshore wind power and solar power for exclusive use in Guangdong Province.
SPIC is an energy enterprise with various mix of generation resources including photovoltaic power, wind power, nuclear power, hydropower, coal-fired power, gas-fired power and biomass power, and is the world’s largest photovoltaic power generation enterprise, new energy power generation enterprise and clean energy power generation enterprise. It ranks 262nd on the Fortune Global 500 list in 2023. By the end of July 2023, the total asset size of SPIC was CNY 1.70 trillion, and the total installed electric power capacity under management hit 238 million kilowatts, of which clean energy capacity accounted for nearly 68%.
In 2022, the global sales of BASF, a world-top chemical company, amounted to EUR 87.3 billion. It ranks 119th on the Fortune Global 500 list in 2023. The Zhanjiang Integrated Base project is the largest single investment by BASF to date, with a total investment amount of EUR 10 billion. The Zhanjiang Integrated Base project will be constructed and operated independently by BASF. Upon completion, the base will become the third largest manufacture base of BASF worldwide. The cooperation with SPIC is another important milestone for BASF to further place Zhanjiang Integrated Base on its roadmap towards 100% renewable energy by 2025, and also marks a major progress in China-Germany low-carbon cooperation after the signing of the Letter of Intent between BASF and the National Development and Reform Commission of China in June 2023.
This agreement has set new records in terms of the trading volume and trading duration of green power in China. The transaction model is highly innovative. This project is another successful example of friendly cooperation between China and Germany.
Zhong Lun Law Firm acted for SPIC in this transaction and provided comprehensive legal services for the execution of the agreement, including assisting with commercial negotiation, reviewing, revising and translating the agreement and issuing legal opinion. The legal team for this project is led by partners Huaining Sun and Wayne Wang, and includes associates Haoran Zhou, Nina Liu and Ray Zhang.
