Hub Power Company (Hubco) has signed the first commercial loan agreements to finance its 1,292-MW power station. The facilities, totalling $240 million, are backed by the Italian and French export credit agencies.

SACE of Italy has agreed to guarantee a ECU 174.9 million ($194.6 million) facility signed on 22 July against political risk. Mediocredito Centrale is the arranger and lead underwriter; the other underwriting banks are Banco di Napoli, Crediop, Banca Nationale del Lavoro (BNL), Centrobanca, Mediocredito Toscano and National Westminster Bank. The facility will finance goods and services provided by lead engineering company Ansaldo Energia of Italy.

A FF 267 million ($48.9 million) loan signed with Credit Lyonnais will finance work by France’s Campenon Bernard, the main civil works contractor. The loan is guaranteed against political risk by France’s Coface. Both facilities are repayable over 12 years, including four years’ grace, and carry interest of 2 per cent over the London interbank offered rate (Libor) for the first eight years, and 2.25 per cent over Libor thereafter (MEED 1:7:94).

A third facility is to be backed by Japan’s Ministry for International Trade & Industry (MITI). It will be used to finance work by Japan’s Ishikawajima- Harima Heavy Industries (IHI), which is supplying the turbines. Commercial loans will cover $686 million in total.