Signing of loan agreement postponed on Azerbaijani energy project
Azerbaijan, Baku, April 28 / Trend I.Khalilova /
The Asian Development Bank (ADB) plans review the issue of providing warranty support to finance the construction of the Cenub Thermal Power pPlant with a capacity of 800 megawatts in Azerbaijan at the ADB Managing Board meeting in June, the Azerbaijani government reported.
"The loan agreement will be probably signed after receiving the approval of the ADB Managing Board," a government source said. "Accordingly, the signing of the agreement, as suggested earlier, at the ADB annual meeting in May in Tashkent, is not possible."
Initially, plans include attracting 150-200 million euro from the consortium under an ADB guarantee. Today, discussions on technical details still continue.
The ADB is ready to provide guaranteed assistance of up to 220 million euro.
Three banks - Societe General, BNP Paribas and City Bank - were chosen to enter the consortium to finance the project.
Preliminary discussions on 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 the loan will be issued for 13 years with a privileged period of three year and a Libor rate +1, 55 in accordance with bank proposals.
Azerenerji's guaranteed assistance will be ADB's first experience in the South Caucasus.
The project cost is 664.1 million euro. In 2010, relevant agencies will allocate 117 million euro for construction. At the moment, 434 million euro have been approved for the project. The government believes attracting funds under the ADB guarantee will conclude project financing.
Bayerische Landesbank, Societe Generale and Credit Suisse allocated 300 million euro for the project. The banks issued a loan under a state guarantee for 10 years. These resources will cover half of the construction costs.
The Islamic Development Bank approved 134 million euro Oct. 20, 2009. The Cenub station will operate with gas and fuel oil.
The ADB has cooperated with the Azerbaijani government since 1999.
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