A financing package has finally been signed in support of a $505 million contract to expand the Cayirhan thermal power plant. Lengthy negotiations with The Export-Import Bank of Japan (Jeximbank) had held up the signing since the summer (MEED 1:8:94).
The package is for the December 1993 award by the Turkish Electricity Generation & Transmission Corporation (TEAS) to a consortium led by Austrian Energy & Environment (AEE). The consortium includes AEE, Gottfried Bischoff & Company and Siemens, both of Germany, Japan’s Mitsubishi Corporation, and the local Guris.
The financing package of export credits and commercial financing includes: AS 1,994 million ($179.2 million ) from Austria; DM 200.9 million ($127.4 million) from Germany, FF 106.8 million ($19.7 million) from France; and Y11,846 million ($118.3 million) from Japan. The commercial Euroloan will account for 15 per cent of these foreign portions, and cover 100 per cent of the remaining local costs. Fine terms for the Euroloan are 1.75 per cent over the London interbank offered rate (Libor) for six years. The lead banks for the Euroloan are Berliner Handels & Frankfurter Bank, Bank of Austria, and Banque Nationale de Paris.
The Cayirhan contract calls for the expansion of the 300-MW plant by the addition of two 150-MW units, together with the installation of a flue gas desulphurisation (FGD) system. Work is now expected to start by the end of January.
Industry sources attribute part of the Jeximbank delay to rivalry for funds from another thermal power plant project, a $900 million, 1,360- MW plant planned near Bursa (MEED 12:11:93). Negotiations on the Bursa proposal had been completed by a consortium of Mitsubishi and the local Enka a year ago. But, the government has cancelled the project, and Jeximbank has withdrawn an offer to meet about 65 per cent of the cost.