PAKISTAN: $630 million power project finalises financing

31 May 1996

The $630 million Uch power project was brought to financial close on 17 May. The 586-MW power plant will be gas-fired and is to be situated at Uch, Baluchistan. The financing structure will comprise:

a syndicated commercial loan, affanged by ABN AMRO of the Netherlands and Germany's Deutsche Bank and covered by a World Bank partial risk guarantee - $75 million a World Bank loan provided through the Private Sector Energy Development Fund (PSEDE) - $10 million an International Finance Corporation (IFC) A loan - $40 million an IFC B loan, also arranged by ABN AMRO and Deutsche Bank - $75 million a construction period commercial loan with US Export Import Bank (Eximbank) cover - S153 million an Eximbank loan provided through PSEDF - $97 million a Bank of China loan provided through PSEDF - $80 million equity participation from the UK's Midlands Electricity -40 per cent, Tenaska of the US - 30.3 per cent, GE Capital, part of the US' General Electric Company (GE) - 18.4 per cent. Hawkins Oil & Gas, also of the US - 8.5 per cent, and the local Hasan Associates - 2.8 per cent - totalling $160 million.

The financing includes a standby facility of $60 million, taking the package to a total of $690 million. The three loans to be provided through PSEDF will be onlent as a single subordinated loan of $187 million. The lead arranger was Latham & Watkins of the US.

This is only the second time that the World Bank has provided a partial risk guarantee.

The first use of the guarantee was for the Hub power project, when it was implemented as a pilot scheme. The guarantee is now to become a mainstream part of the World Bank's financing operations.

The 586-MW power station will be implemented on a build-own-operate (BOO) basis by Uch Power. The plant will comprise three gas turbine generators and will be the first private power project in Pakistan to use the indigenous supply of low and medium British thermal unit (BTU) gas, to be supplied by the Oil & Gas Development Corporation. The plant's output will be purchased by the Water & Power Development Authority (WAPDA). The main engineering, procurement and construction contract was awarded to GE with China's Harbin Power Equipment & Export Company, which carried out the design work. Black & Veatch of the US has been appointed as owner's engineer. Trial generation is scheduled for the end of 1997 (MEED 15:9:95).

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