Croatia’s first IPP breaks ground

US energy group Enron has broken ground on the Jertovec combined cycle power plant, Croatia’s first independent power project. The $175m plant is the first major US private infrastructure investment in Croatia and will help the country rebuild its economy after the civil war.

Enron will build, own and operate the 240 MW plant at a site north of Zagreb. It is one of a series of independent power plants planned by the government to support the country’s economic rehabilitation. Enron hopes that the move will position it well for the planned privatizations of state energy enterprises this year.

Croatian state power utility HEP has agreed to purchase all the power from the plant under a 20 year concession. Major construction activities will begin this year and the plant will be operational by 2002. HEP will also supply the plant with natural gas fuel.

The Croatian government has forecast annual economic growth of 3-5 per cent and wants to increase generating capacity from 4000 MW to 7000 MW by 2010.

The government of Azerbaijan has signed a financing deal with the Japan Bank for International Cooperation (JBIC) for the development of Azerbaijan’s first natural gas fired combined cycle power plant. The 400 MW Severnaya plant, near Baku, is part of a government programme to switch to efficient and environmentally-acceptable natural gas fired generation technology.

Severnaya will be funded by a ¥18 332m ($172m) package from the JBIC. The plant will replace an existing 150 MW oil-fired power plant, ensuring a stable supply of power for the Severnaya area and curbing air pollution. Due to its environmental benefits, the financing package includes the lowest interest rate available to borrowers.

The Azerbaijan government has implemented a programme of renovating existing oil-fired power plants and converting them to natural gas firing. Over 80 per cent of the country’s generating capacity is oil-fired.

Kosovo faces power rationing

A fire at the Kosovo B power station and network faults have caused electricity supplies to fall below critical levels in Kosovo, forcing rolling blackouts to be implemented throughout January. Officials from the United Nations (UN) have admitted that its plans to revive the province’s power sector before the harsh winter months of January and February were over-optimistic.

The UN has begun rationing power distribution and has divided the province into three zones, each receiving electricity on a two hours on-four hours off basis. Power supplies have been as low as 200 MW – approximately one third of Kosovo’s normal electricity requirements. The UN Mission in Kosovo (UNMIK) recently agreed to receive imports of 60 MW per day from Greece’s Public Power Corporation (DEH), but no electricity has been supplied yet due to network faults. Kosovo is also receiving 100 MW daily from Albania and Macedonia.

A fire broke out at the Kosovo B power station in mid-January, putting one of its two generating units out of action. Repairs may take several weeks.

Gitaru on line

An 80 MW extension to Kenya’s Gitaru hydropower plant has entered commercial operation, according to Mott MacDonald, engineering consultant to the project. The additional unit – a vertical Francis turbine generator – increases capacity at the plant to 225 MW and will provide the Kenya Electricity Generating Company with year-round peaking power.

The new unit was installed by German consortium Siemens-Voith on a fast track schedule of 34 months from contract signing to commercial operation. The original plant features two 72.5 MW units and was originally constructed in 1978. Mott MacDonald, together with Knight Piesold, supervised the civil works and the installation of the generating unit and ancillary equipment.

Generation buyout in Georgia

Two subsidiaries of US energy company AES Corp. have gained control of electric generating facilities in Georgia with a combined capacity of 823 MW. Another AES subsidiary in Georgia – utility AES Telasi – has finalized lending agreements for a re-metering and domestic system upgrade project in Tblisi.

AES Gardabani Holdings is to buy outright the 600 MW Gardabani thermal power plant, while AES Georgia Holdings has acquired a 25 year management contract on the Khrami I and II hydropower plants. The total acquisition price for the facilities is $11m plus the assumption of $80m of loans. The output of the plants will be sold to AES Telasi and to the Georgian wholesale electricity market.

AES Telasi will use a $60m loan package from the EBRD and IFC to upgrade domestic metering systems in Tblisi where it serves 370 000 electricity customers. The enhancement will give the utility the ability to disconnect customers for failure to pay their bills.

News digest

Czech Republic: Electricity company CEZ is aiming to boost power exports in order tocompensate for falling domestic consumption. The company istargeting Poland, Slovakia and Hungary, and wants to maintain its exports to Germany at levels reached in late 1999.

Hungary: German group Bayernwerk has expanded its Hungarian electricity sector interests by acquiring a majority stake in distribution company Titasz. It increased its holding from 2.2 to 82.2 per cent for an undisclosed sum in early January

Latvia: US company CME International and Caterpillar Power Ventures are to invest $70m to build a natural gas fired power station in the western Latvian town of Liepaja. Output from the 50 MW plant will be sold to state-owned power firm Latvenergo.

Montenegro: The province of Montenegro is planning to privatize several key sectors of its economy to bolster its finances and free itself of ties with sanction-bound Yugoslavia. It wants to sell 51 per cent stakes in its electricity company and other state firms. Its privatization council says that it has already had nine offers to audit and prepare tenders. Electricity company Elektropriveda is estimated to be worth $1.2bn.

Namibia: International and local pressure groups have called on financial institutions to not support the construction of the Epupa hydropower plant. Campaigners have urged the Development Back of South Africa, the European Investment Bank and the African Development Bank to wait until June 2000 when the World Commission on Dams releases its recommendations before making a decision on their support for the project.

Turkey: The government has failed yet again to make a decision on the construction of Turkey’s first nuclear power plant, forcing the national power company TEAS to ask the three international bidders for the contract for a one-month extension. The government announced in December 1999 that it would intensify its efforts to conclude work on the tender, but failed to reach a decision by the year-end. The project has been under planning for almost three decades but has been beset by protests, delays and cancellations.

Turkey: The UK will grant export credit for a proposed hydropower project in Turkey if certain conditions are met. The Exports Credit Guarantee Department will underwrite Balfour Beatty’s $322m contract for the Ilisu project on the Tigris river if environmental and social concerns about the project are addressed.