First Garbage Burning Plant in Azerbaijan May be Managed by Foreign Company for 30 Years

Business Materials 22 August 2008 20:56 (UTC +04:00)

Azerbaijan, Baku, 22 August /corr. Trend I.Khalilova / The Ministry of Economic Development of Azerbaijan is prepared to conclude a contract with the French company CNIM on the project of construction of the first garbage burning plant in Baku in the type "turn-key", which will be realized according to the principle DBO (Design - Build - Operate), the Ministry said on 22 August. It means that the responsibility on the design, construction and management of plant will be taken by one executor - CNIM.

"The contract will be signed after co-ordinating relevant procedures," the Ministry said.

The project envisages building a plant with an annual burning capacity of 500,000 tons of domestic wastes and the operation by the French company for 20 years (with the possibility of prolongation by 10 more years). The garbage burning plant will have two lines on 250,000 tons and turbines on the production of electric power. According to the represented project, the capacity of the plant in the future can be increased by 250,000 more tons. As a result of burning of domestic wastes, there will be annually produced nearly 231.5mln KWt electric power. Sediments of ashes, which will appear as a result of burning of wastes, can be used for road construction.

The cost of the project is €346mln with a period of construction at 36 months.

At present the Ministry studies the possibilities of attracting external financing for the project. Consultations have already begun with the foreign commercial banks and the international financial institutes on the general conditions of financing.

In particular, the European Bank for Reconstruction and Development (EBRD) expressed interest in this project. As the contractor for the construction of the plant was selected the French company CNIM, accordingly French banks BNP Paribas and Societe General, which have experience in this regard, are ready to finance. In such projects the risks on credits are insured by the German export insurance agency HERMES and French export insurance agency COFACE.

In the initial stage, financing of the project can be realized due to the funds, allocated in the State Investment Program. In 2008 nearly AZN 130mln was allocated in State Program for these purposes.

Official rate on 22 August is 0.8129 AZN/USD

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