Банкеръ Weekly

Briefs

AMERICANS READY TO BUILD MARITSA IZTOK 1 IN 2005

The US energy company AES is ready to launch in 2005 the project for building the Maritsa Iztok 1 thermoelectric power station, the company's President Paul Hanrahan said at a meeting with the Bulgarian MP Simeon Saxe-Coburg-Gotha during the week. This information was confirmed by the Government press centre. Bulgaria is among the key priorities in the investment programme of AES. Its BoD supports the project and wants its implementation to start as soon as possible. We are willing to cooperate with your Government in order to provide accessible and ecologically clean electricity to Bulgarian households and to the country's economy, Mr. Hanrahan said. The US company projects to build two coal-fuelled energy units on the site of Maritsa Iztok 1, each of 335 megawatt capacity. According to recent estimates, the investment will total some USD1.2BN. A huge part of the money will be spent on environment friendly equipment, including sulphur purification installations in each of the units. The contract for the construction of the new capacities and for the purchase of generated electricity (at 4.5 US cents/kWh) was closed between the National Electricity Company (NEC) and AES in June 2001, but its implementation was postponed due to financial difficulties of the US company. According to the report of Goldman Sachs from December 2003, however, the state of AES improved considerably and its sale proceeds totalled USD8.4BN last year. Therefore, AES insiders claim now they will build on their own the two units of the power station without seeking strategic investors. It was also announced that an agreement had been reached with the off-shore company 3C, registered on the Island of Mauritius especially for the Bulgarian project, and the US company would buy out the entire 12% stake of the minority partner in the project. A special structure for financing without state guarantees was worked out for raising the EUR1BN, necessary for the construction of the new capacities in Maritsa Iztok 1. The bulk of the money - EUR500MN - will be provided by the German agency for export crediting, KfW. The London-based EBRD and other international banks will allocate EUR200MN, and the remaining part of the money should come from the US investor AES. The loans will be guaranteed by five European export agencies: the French Coface, the German Hermes, the Czech EGAP, the Italian Sace, and the Austrian OeKB. AES plans not only to keep the current 20,000 working positions in the thermoelectric power plant, but to open 3,000 new ones. Local firms will be attracted as subcontractors in the construction. Even if work begins in mid-2005, the building of the two units, according to the estimates of the US company, will take about 42 months. Therefore, the power station could be commissioned in mid-2009 at the earliest, i.e. long after units 3 and 4 of the Kozlodoui N-plant stop operations.

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