Italy's Ansaldo Energia has initialled a long-awaited turnkey contract to build a 350-MW power station for the local private Fauji Foundation, at Khalifa point, Baluchistan province. It expects to sign the formal agreement in the first week of February, a company official says.
The 23 December initialling marked an important step forward for the country's second private power scheme, following a letter of intent to Ansaldo in 1991 (MEED 5:11:93). According to the turnkey contract, Ansaldo will engineer, supply and install the oil-fired station. The civil works are likely to be subcontracted to a local company.
Financing of the estimated $500 million project will be on a build-own- operate basis, with a structure similar to that used for the Hub power project (MEED 24:12:93). It will involve equity from Fauji and co-sponsor Hong Kong-based Canamerican.
The Manila-based Asian Development Bank and the UK's Commonwealth Development Corporation are considering taking a small stake. The remainder will be raised in loans from international financing agencies and commercial banks.
The World Bank is considering guaranteeing commercial loans against political risk through the private-sector energy development fund, administered by the government. Its involvement may amount to $90 million. Final financial arrangements are not expected until late this year.
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