TURKEY: Power plant financing progresses

29 July 1994

Negotiations for the financing package supporting the $500 million contract to expand the Cayirhan thermal power plant are expected to be concluded by early August, say industry sources. This follows the agreement of competitive financing terms in June (MEED 1:8:94).

The overall interest on the commercial and export credit in the package will be 1.75 per cent and 0.75 per cent, respectively, over the London interbank offered rate (Libor). The contract was awarded late in 1993 to a consortium headed by Austrian Energy & Environment (AEE) and including Gottfried Bischoff & Company and Siemens, both of Germany, Japan's Mitsubishi Corporation and the local Guris.

The German financing has already been signed. It comprises DM 179.3 million ($115 million) in export credits and a commercial element of DM 72 million ($46 million). Signing of the other components is expected soon. They are:

Austria - export credits valued at AS 1,730 million ($158 million), and a commercial element of AS 650 million ($59 million)

France - export credits valued at FF 94.7 million ($17.7 million), and a commercial element of FF 35 million ($6.6 million)

Japan - credit valued at Y12,319 million ($125.8 million) from the Export- Import Bank of Japan (Jeximbank) , and a commercial element of Y1,868 million ($19 million). This will probably be the last element to be signed before the overall package is concluded; a team from Jeximbank was expected to visit before the end of July.

Leading banks arranging the commercial financing are Berliner Handels & Frankfurter Bank, Bank Austria, and Banque Nationale de Paris. The contract calls for two extra 150-MW units and the installation of a flue gas desulphurisation (FGD) unit at the plant, to the west of Ankara.

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