Transaction Advisors sought for the Mazar Independent Power Plant in Afghanistan

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Transaction Advisors sought for the Mazar Independent Power Plant in Afghanistan

The Government of Afghanistan (GoA) has also been exploring options to develop generation plants.

In this respect, discussions have been held between GoA and various private parties for the possible development of a gas-to-power plant in Mazar-e-Sharif (estimated 50MW) under an Independent Power Plant (IPP), the Mazar IPP.

The Mazar IPP would be implemented on a competitive process. It would also represent the first project of the sort and is, therefore, considered important in terms of precedent setting as it could serve as a model for future transactions of the same nature.

Public parties involved in the discussions on the Mazar IPP have so far included the Ministry of Finance (MoF), the Ministry of Energy and Water (MEW), the Ministry of Petroleum and Mines (MoPM), Da Afghanistan Breshan Sherkat (DABS), the state owned power utility, and Afghan Gas Enterprise (AGE), the state owned gas facility. Private parties involved include the International Finance Corporation (IFC) and the Ghazanfar Group (GG), a private Afghan conglomerate. A Memorandum of Understanding (MoU) was signed between the parties in connection with the Mazar IPP Project on May 13, 2015.

Discussions are still on-going on the exact structuring of the transaction – including sponsors, financing, and operational arrangements. However, the following parameters are considered:

  • the IPP would be established as a corporation in Afghanistan (Project Company) and the plant constructed on land leased from GoA;
  • the gas needed for the plant would be supplied by AGE under a long term gas supply agreement;
  • power produced would be purchased by DABS under an off-take agreement (estimated 20 years term).

Given the number and complexity of issues to go ahead with the Mazar IPP, the GoA has requested assistance from the International Development Association (IDA), through the Sustainable Development of Natural Resources Project II (SDNRP II) implemented by MoMP, to hire transaction advisors (Advisors).

The Advisors are expected to work closely with MoMP as well as other public parties, including AGE, MEW, DABS and MoF, during the structuring and closing of the Mazar IPP transaction. It is expected that “on the job training” will be provided to the different public entities involved in the Mazar IPP to build capacity associated with the implementation of PPP-type transactions more broadly.

Expressions of interest must be delivered to the email address below by no later than 21 August 2015, 14:00 local time. Expression of Interest with all relevant information and documents must be submitted and subscribed “Expression of Interest for - “Consultancy Services of Transaction Advisors for Mazar Independent Power Plant” Reference No. MOMP/PMU/CT-II-34 must be quoted in all correspondence, including the Expression of Interest.

  • Ministry of Mines and Petroleum, Program Management Unit (PMU)
  • Attention: Abdul Mubeen Shahab, Acting Executive and Director
  • Afghanistan Resource Corridors Project (ARCP)-World Bank Funded.
  • Ministry of Mines and Petroleum (MoMP)
  • Address: Pashtunistan Watt, Kabul - Afghanistan
  • Afghanistan Geological Survey Building (AGS), 2nd floor, Annex Building,
  • Close to Abdul Haq Four-way, 2nd Makrorayan, Kabul, Afghanistan.
  • Email: mshahab@mom.gov.af copy to tariq.pmu@gmail.com

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