ADB: Issue of funding Azerbaijani project under ADB warranty will be resolved by late October
Azerbaijan, Baku, Oct. 15 / Trend N.Ismayilova /
The issue of financing a project to build the 760-megawatt Cenub thermal power plant in Azerbaijan under an Asian Development Bank (ADB) guarantee will resolved by late October, the ADB Baku Office reported on Friday.
"Today, the ADB is in talks with JSC Azerenergy to resolve technical issues, which is expected to be addressed by late October," the bank said.
Following the outcome of these negotiations, it will ultimately be determined whether funding under the ADB guarantee support will be attracted.
The consortium including Societe Generale, BNP Paribas and City Bank is involved in financing the project.
The ADB Board of Directors approved $ 232.32 million in warranty support for the project June 22. Although the mandate for negotiations expired on 16 July, taking into account the foreign banks' interest in this project, there was expressed readiness to extend the mandate letter.
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.
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