Financial close reached for Turkish combined-cycle gas turbine power plant

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Financial close reached for Turkish combined-cycle gas turbine power plant

The European Bank for Reconstruction and Development (EBRD) has provided long-term financing package for the development of a 950 MW combined-cycle gas turbine power plant in Turkey.

The plant will be built by Acwa Guc Elektrik Isletme ve Yonetim Sanayi ve Ticaret A.S., a Turkish subsidiary of ACWA Power.

The total project investment is estimated at US$1 billion.

The EBRD has played a key role in securing long-term financing for the construction of the new plant by arranging a syndicated loan of US$250 million: US$ 200 million for the EBRD's own account and US$50 million syndicated to Banque Saudi Fransi which in addition, is providing parallel financing of US$100 million under a murabaha-Islamic financial instrument.

The International Finance Corporation (IFC) is also providing a syndicated loan of US$170 million, of which US$45 million is syndicated to the Korea Development Bank.

Korea Eximbank and Standard Chartered Bank, with cover from Korea Eximbank, are joining as parallel lenders with US$90 million and US$60 million respectively.

EBRD Director for Power and Energy Nandita Parshad said:

"This is a landmark transaction for many reasons: it brings together international financial institutions and commercial banks to lend on similar terms; it offers the longest tenor to date - 16 years - for a power project in Turkey; it is also the first time in Turkey that an independent power producer is financed on a limited-recourse basis."

Paddy Padmanathan, President and CEO of ACWA Power, commented:

"The Kirikkale power project, which when completed will be a highly competitive electricity generator, is the company's first investment in Turkey. It is a solid foundation for the multi-fuel power-generation portfolio we seek to establish in this thriving economy. The project represents yet another milestone in ACWA Power's market expansion beyond the countries of the Gulf Cooperation Council."

As an independent power producer (IPP), the plant will operate on a merchant basis, selling the electricity it generates on the power market. The new facilities will be located at 50 km east of Ankara.

To date, the EBRD has invested over 4 billion euros in Turkey with half of this dedicated to sustainable energy projects.

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