A protocol for a $535 million financing package has been reached between the government and a venture negotiating a build-operate-transfer (BOT) contract for a 500-MW power station to be sited at Ereglisi on the Sea of Marmara. This follows the passage of legislation clearing the way for such schemes (MEED 24:6:94).
The scheme is being negotiated by a venture comprising the UK’s Enron Europe, Midland Electric and Wing International with the local Gama. Their package breaks down into $240 million worth of credits from the Export- Import Bank of the US (Eximbank), $102.8 million of export credit to be covered by Germany’s Hermes, and $85.2 million of loans to be secured by the US’ Overseas Private Investment Corporation (OPIC).
The remainder of the financing will be supplied as capital by the local partners in the venture, Trakya Elektrik. In addition, a standby facility will be raised from the commercial markets, totalling $51.8 million; of this, $42.8 million will be reserved for cost overruns, and the remainder for working capital requirements.
The deal is one of two being negotiated for BOT gas-fired plants; the other is a project proposed by a venture led by Belgium’s Unit International (MEED 12:12:93). The Enron group is being advised by Bankers Trust with Kidder, Peabody of the UK. Sources say the negotiations are proceeding smoothly towards the conclusion of a final agreement for work to start on the two-and-a-half year project. Some details remain to be agreed with the treasury.
Syndicating the commercial financing might have to wait until perceptions of Turkey as an international borrower improve. But the commercial element is a standby facility, and is small in comparison with other BOT projects like the $1,200 million Birecik hydroelectric dam on the Euphrates.