Credit agreement with EBRD to be signed in July 6

Oil&Gas Materials 6 July 2006 18:23 (UTC +04:00)

It is expected at the end of this month to sign a credit agreement on the financing of the project of reconstruction of Azerbaijan Heat Power Plant in Mingachevir city through the European Bank for Reconstruction and Development (EBRD), the head of EBRD Raymond Konvi.

The credit wikll be signed by Peter Reineger, the director of the EBRD energy business group. The volume of the credit is 115 million euros. The credit will be issued for 15-year period, with interest rate Libor+1%. According to Chonvey, the bank has a desire that the

tariffs for the electric power are delivered to prime cost by 2010.

The Heat Power Plant is the largest electric power station in Azerbaijan. it has 8 energy block with a capacity of 300 megawatt, but in result of long-term use, the capacity of the plant has decreased. This year Azerenerji, together with the Russian company Power machines realized the reconstruction of the fifth block and this allowed to deliver the capacity of production to 330-340 megawatt.

The reconstruction project includes the modernization of the semi energy blocks, water supply system and smoke pipes. Earlier talks were held with EBRD, but Azerbaijan was not satisfied with the terms of the credit. However, after the visit of the EBRD president Jane Lamers visit to Azerbaijan, the talks were restored.