Azerbaijan, Baku, July 21 / Trend I.Khalilova /
Societe Generale, BNP Paribas and City Bank are ready to extend the mandate for negotiations that expired July 16. The consortium is involved in financing a project to build the 760-megawatt Cenub thermal power plant in Azerbaijan under an Asian Development Bank (ADB) guarantee.
The ADB Board of Directors approved $232.32 million in warranty support for the project June 22.
"Although warranty support for the project was approved June 22, a final agreement with the Azerbaijani side on the terms of the foreign banks granting the loan has not yet been reached," the ADB Baku Office reported.
Azerenergy told Trend that the delay is likely linked with the failure to provide a draft loan agreement to the Azerbaijani government.
In any case, the ADB office stated that the banks are willing to extend the mandate, as they are interested in financing 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.
Azerenergy's guaranteed assistance will be the 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 OPEC Board of Directors approved 20 million euro for Azerbaijan. Under the loan agreement, the funds are allocated for 15 years with a grace period of three years and an annual rate of 5.1 percent. The Abu Dhabi Fund for Development's Board of Directors approved a $60-million loan.
Cenub will operate with gas and fuel oil.