The International Finance Corporation (IFC) is to decide in June on proposals to use equity and loans to back the 120-MW Gul Ahmad power scheme in Karachi. It is Pakistan’s second fast-track energy project.
The main sponsors for the estimated $138 million project are: the local Gul Ahmed Textile Mills; Japan’s Tomen Corporation; Finland’s Wartsila Diesel; and the IFC.
Wartsila will supply the diesel generators, and carry out the operations and maintenance. It will share the lump sum turnkey construction contract with Tomen.
A company called Gul Ahmad Energy will be set up to run the project. It will have a capital of about $41 million. Gul Ahmed Textiles will hold 70 per cent. Tomen will take 20 per cent, and the IFC plans to invest in the remaining 10 per cent.
The IFC is also to provide $27 million in senior debt. It will also guarantee a commercial syndicated loan of $35 million. The Finnish export credit agency, the Finnish Guarantee Board (FGB), will provide export credits of $35 million.
The financial adviser for the scheme is the Netherlands’ ING Bank. ING is expected to underwrite the IFC loan and the FGB’s guaranteed portion of the financing. A financial close for the scheme is expected by the third quarter of 1995.
Gul Ahmad Energy will have a 22-year power purchase agreement with the Karachi Electric Supply Corporation (KESC). The heavy fuel oil for the project will be supplied by Pakistan State Oil (PSO).
The power station is expected to be fully operational by mid-1997. Power projects completed before the end of 1997 qualify for a bonus of $0.25 a kWh, which is included in KESC’s power purchase price.
The first fast-track energy project, a 120-MW power station, the Kohinoor Energy project near Lahore, was signed earlier this year (MEED 3:2:95). The project was set up by the local Saigol Group, with the same team of overseas sponsors as the Gul Ahmad plant.