• The IFC is expected to take a 20 per cent direct equity stake in the independent power project (IPP)
  • Banks have been invited to express interest in the $560m debt syndication by the end of September

The Washington-based International Finance Corporation (IFC) has invited lenders to participate in the debt syndication for the Zakho independent power project (IPP) in the Kurdish region of northern Iraq.

According to a source close to the project, lenders have been invited to express interest in the estimated $560m syndication deal by the end of September. The IFC is expected to take a 20 per cent direct equity stake in the IPP.

The majority shareholder in the consortium developing the IPP is Unit Investment, which was set up as a subsidiary of the Netherlands’ Unit Group to own and develop power generation assets in the Middle East, primarily Turkey, and other countries in Europe. The other partners in the developer consortium are Turkish firms Polteks and Unipol Energy.

A meeting with banks, the IFC and the developer is scheduled to take place in Istanbul in mid-October with the aim of reaching agreements on the debt syndication.

The gas-fired Zakho IPP is planned to be developed in two phases. The first phase will involve constructing an 840MW gas-fired power facility. It will require a capital expenditure of about $800m, according to sources close to the scheme.

The second phase will involve converting the gas turbines into combined-cycle units, and adding a 420MW steam turbine to reach the targeted installed capacity of 1,260MW.

In addition to the 20 per cent direct equity stake in the IPP, the IFC recently reached an agreement to buy 23 per cent of Unit Investment. The IFC was advised on the transaction by the US’ White & Case.  

The Zakho project will be the sixth IPP to be developed in the Kurdish region of northern Iraq.

MEED reported in November 2014 that the local Qaiwan Group has started developing the 750MW first phase of the Bayzan IPP in the Suleimaniyah province.

The initial phase of the Bazyan plant will be built as a simple-cycle gas plant, which will be upgraded to a 750MW combined-cycle facility by December 2016.

Turkish contractor Enka is building the power plant, while the US’ GE will provide four gas turbines and one steam turbine.

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