Azerbaijan, Baku, March 20 / corr Trend I.Khalilova /
Azerbaijani government and a consortium of foreign banks attracted to finance banks to finance the construction of the Cenub thermal power plant with a capacity of 800 megawatts under a guarantee from Asian Development Bank (ADB) are expected to sign a loan agreement in an annual meeting of the ADB Managing Board, the government said.
The 43rd annual meeting of the ADB Managing Board will be held in Tashkent May 1- 4. the bank will for the first time assemble in a Central Asian country holding membership at the ADB.
"We expect soon to obtain a loan agreement, which will outline term and volumes of financing, a source said. Initially, it is planned to attract 150-200 million euros from the consortium under the ADB's guarantee."
The ADB is ready to provide guarantee assistance of up to 220 million euros.
Three banks - Societe General, BNP Paribas and City Bank - were chosen to enter the consortium to finance the project.
Preliminary discussions over financial terms of commercial banks were held in January during ADB financial specialists Martin Endelmann and Roland Pladet's visit to Baku. They held consultations in the Finance Ministry and Azerenerji OJSC.
The government said that, the loan will be issued for 13 years with privileged period for three year and the Libor rate +1, 55 in accordance with the banks' proposals (total loan rate will be approximately four percent taking into account that libor equals 1.4 percent,).
Azerenerji's guarantee assistance will be ADB's first experience in the South Caucasus region.
The project cost is 664, 1 million euros. In 2010, relevant agencies will allocate 117 million euros for construction work. At the moment, 434 million euros is approved for the project. The government believes attracting funds under the ADB guarantee will conclude financing for the project.
Bayerische Landesbank, Societe Generale and Credit Suisse banks allocated 300 million euros for the project. The banks issued a loan under a state guarantee for 10 years. These resources will cover half of the construction cost.
The Islamic Development Bank approved financing of 134 million euros Oct. 20, 2009. The Cenub station will operate with gas and fuel oil.
ADB has been cooperating with the Azerbaijani government since 1999.
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