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Contract with EBRD on Reconstruction of Power Grid to Bring Profit of $300,000 a Day

Oil&Gas Materials 22 November 2006 18:55 (UTC +04:00)

Azerenerji JSC informed on its plans to announce a tender on reconstruction of Azerbaijan Heat Power Station (HPS) in Mingachevir, west Azerbaijan. The European Bank for Reconstruction and Development (EBRD) is to finance the project.

The reconstruction of the HPS will enable the sufficiency of the national energy system capable of covering the country demand in electricity. The creation of energy capacities are probable to lead to the commencement of energy export.

The project is estimated at $150mln. $115 mln of the total amount will be covered by the EBRD. The reconstruction of the station will save $300,000 in current prices at the expense of mazut. Moreover, the company can also gain EUR 150mln over 5 years at the expense of cut in launching of nitrogen and sulphur gas within the framework of Kiot Agreement.

The President of Azerenerji JSC, Etibar Pirverdiyev, informed Trend on a credit agreement to be signed with the European Bank for Reconstruction and Development (EBRD), which is to finance the reconstruction of Azerbaijan Heat Power Station (HPS). It has been submitted to the Cabinet of Ministers, Trend reports. The document has been coordinated with the ministries and relevant departments of the country.

Work for the reconstruction of the energy blocks are planned to commence in the 1st Quarter of 2007. Until that period it is necessary to hold a tender to define a general contractor.

Earlier, a consultant company for the project had been identified and confirmed by the Bank. The Japanese-German Alliance TEPSCO and Fichtner won the bid to provide consultation services within the project for the reconstruction of Azerbaijan HPS in Mingachevir City.

The Consultant will prepare a technical specification for the project, out of which, the tender proposals of contractors regarding reconstruction of HPS will be taken into consideration. The contractor will also prepare and hold a tender to appoint the general contractor.

Azerbaijan HHS, which was constructed in the 1980s, is the biggest electric power station in Azerbaijan. It possesses 8 energy blocks with a capacity of 300 kVt, but due to poor equipment, the capacity of the block has decreased. This year Azerenerji, together with Russian Force machines, carried out the reconstruction of the fifth energy block which allowed an increase to a capacity to 330-340 kVt.

The project on construction of power station includes upgrade of energy blocs, water hence system and chimney. Earlier talks with the EBRD were held, but Azerbaijan was dissatisfied with the terms of crediting. However, after the visit of the EBRD President, Jean Lemierre, to Azerbaijan, the credit terms were removed and talks continued.

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