The Netherlands’ ABN AMRO and Germany’s Deutsche Bank have been appointed lead underwriters for the privately financed 584-MW gas fired plant in Uch, Baluchistan.

The final cost of the project has not been set, but the total capital cost, for which ABN and Deutsche are responsible, will be around $600 million.

‘It is a very complex financing and the details are still fluid,’ a project source said. ‘Putting together the finance for a project of this size will be a daunting task, it is in the nature of these projects to be complex,’ he added.

Current plans suggest that the financing will be split as follows:

Equity – 20 per cent. Project sponsors are turnkey contractors General Electric Company (GE), Tenaska International and Hawkins Oil & Gas, all of the US, Central Power, a subsidiary of the UK’s Midland Electricity Board and the local Hasan Associates (MEED 14:10:94).

Senior debt – 50 per cent. To be handled by the underwriting banks.

Subordinated debt – 30 per cent. Part may come from the World Bank’s private sector energy development fund. Other development institutions may also be approached.

Export credit agencies will be approached for possible guarantees, particularly from the US and China, reflecting the participation by the US sponsors and by China’s Harbin Power Equipment & Export Company, which is to do the design work. The sponsors will also approach the World Bank’s Multilateral Investment Guarantee Agency for political risk support.

A key aim of the financial arrangements is to minimise the amount of funds that come from multilateral institutions such as the World Bank in favour of greater private investment.