LOAN AGREEMENT ON SYNDICATED FINANCING MAY BE SIGNED IN JULY

The government of Azerbaijan and the financial consortium completed considering the loan agreement on syndicated crediting for the construction of a new steam-and-gas plant of the 506 MW capacity in Sumgayit. The loan agreement, depending on the power of authorities, may be signed in July. The document has been fully agreed upon, and no Department, including the Finance Ministry has any comments or remarks to it.

According to the agreement, the Financial Consortium, comprising the German Bayerische Landesbank (the organizer of financing) and French banks Societe Generale and BNP

Paribas will allocate 300 million euro by the single yearly rate LIBOR+0,55%. The loan will be opened for 15 years with 3 years of the grace period. Each of the banks will lend per 100 million euro. "During the coordination process there were objections concerning the financing participation of the Bayerische Landesbank, which had been consulting Azerenerji on involvement of financing, but on the whole it does not contradict to the world practice, the Cabinet of Ministers (CM) said.

The funds of consortium cover all project costs, excluding a new gas compressor station. "It has been decided, that funding of a new compressor station construction will be on account of the JSC Azeriqaz own means. The cost of works has not been estimated so far, but will depend on the capacity selected and the elected type of compressors”, the CM noted.