Azerbaijan, Baku, June 7 / Trend I.Khalilova /
The Asian Development Bank (ADB) has asked the Azerbaijani government to accelerate the preparations of a warranty support contract for foreign banks to finance a project to build an 800-megawatt thermal power plant (TPP), the ADB Baku Office reported today.
"Project approval by the ADB Board of Directors is scheduled for June 22," the office reported. "If the project is not officially registered by July 1, the warranty terms may change."
If the margin on guarantees is now 0.2 percent, the bank will increase the margin by 0.1 percent to 0.3 percent from July 1.
ADB specialist Martin Endelman visited Baku last week to discuss preparations for the contract's approval with the government.
Initially, plans include attracting 150-200 million euro from the consortium under an ADB guarantee, the government reported earlier. The ADB is ready to provide 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.
The loan will be issued for 13 years with a privileged period of three year and a Libor rate of +1.55 in accordance with the bank's 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 in loans Oct. 20, 2009. The station will operate with gas and fuel oil.
The ADB has cooperated with the Azerbaijani government since 1999.