Memo on Construction of First Private Electric Station in Azerbaijan Signed
Azerbaijan, Baku / Trend corr I. Khalilova / The Azerbaijani Investment Company and the South Korean KEPCO Electric Power Corp signed a MOI on construction of a private electric station in Azerbaijani Alat settlement capable of 700 MW. A contract on construction, management and share holding will be signed at the beginning of 2008.
Cost of the project varies between $700mln and $1bln.
The MOI envisages establishment of an operating company. Azerbaijan's share in the project will not exceed 25%.
By the end of this year KEPCO will submit the final draft of feasibility study. Such projects are implemented in several stages. Usually a set of proposals is developed on the basis of feasibility study and it includes terms of gas provision, energy purchase and other documents, the Azerbaijani Deputy Economic Development Minister Mikayil Jabbarov said.
After legislative basis for the project is established, investors will be selected. Construction may begin in the summer of 2008.
The Vice-President of KEPCO expressed his readiness to assist in development of Azerbaijani energy sector. "Our company was established in 1961 and is the largest one among electric energy producing companies in Korea. That will be our first project in Azerbaijan, and we want to construct the most high-quality electric station in the world to expand powers Azerbaijan's capacities," the Vice-President said.
Initial agreement with KEPCO was achieved during its President's Baku visit on 24 September, when KEPKO and the Azerbaijani Economic Development Ministry signed a memo specifying common principles of the project.