CBK hydropower finance closed

Impsa Ltd. and Edison Mission Energy, the two partners developing the Caliraya-Botocan-Kalayaan (CBK) hydro project in the Philippines, have reached agreement with institutions for project financing.

A loan agreement was signed on August 17, 2000 between the two developers and Société Générale, Banque Nationale de Paris, Dai-Ichi Kangyo Bank, and the Industrial Bank of Japan for $460m in financing. The project involves the rehabilitation and expansion of three hydropower plants.

The loan package consists of a loan of $340m from the banks and $120m in equity from Impsa and Edison Mission. The loans will be insured under a private risk insurance programme. The financing will also fund a special loan of $70.8m from CBK Power, to the Philippines’ National Power Corporation.

OPIC may reclaim insurance payout

US overseas risk insurance unit, OPIC, has said that it may chase the Indonesian government for $290m it says is owed to MidAmerican Energy Holdings Co., which developed two geothermal power plants in Indonesia.

MidAmerican won an international arbitration case in 1999 after Jakarta reneged on contracts to purchase power from the two plants MidAmerican had built. Indonesia’s finance ministry failed to pay the Nebraska-based company compensation as directed under the court ruling, forcing MidAmerican to make a claim on its insurance.

The insurance claim was the largest ever in the history of OPIC. OPIC believes that Jakarta’s actions could be judged as ‘expropriation’, entitling the USA to seize Indonesian assets.

The Indonesian government attempted to renegotiate power offtake contracts with independent power producers after the Asian financial crisis hit. The rupiah fell nearly 90 per cent against the US dollar, making it difficult for national utility PLN to meet payments.

  • Malaysia’s Tenaga Nasional Bhd (TNB) is to develop two thermal power plants in Indonesia. It will construct two 2 x 60 MW projects, one in Tanjong Karang, south Sumatra, and another in Minahasa, north Sulawesi.

India’s PowerGrid in line for ADB help

The Asian Development Bank (ADB) is set to provide the first partial credit guarantee to an Indian entity – state-owned PowerGrid Corp. – which will help the company raise an international commercial loan.

The proposal envisages PowerGrid raising a syndicated loan of up to $120m on the international loan markets on the back of a partial credit guarantee from the ADB. The ADB will underwrite the risk for the latter half of the loan, starting in year seven. The Indian government will also provide a counter-guarantee.

  • The ADB has held back the release of a $500m loan to Gujurat state owing to delays in carrying out power sector reforms. ADB wants the state government to cut the subsidies given to the agricultural sector but impending elections in the state have prevented reform progress.

India tests microturbine on grid

US-based Honeywell Power Systems has installed and commissioned a Parallon 75 microturbine at a power station in India, representing the first grid-connected installation of this type of technology in the country.

Delhi Vidyut Board, a New Delhi-based utility, is testing the ability of the unit to add flexibility to its power system. If the evaluation proves to be a success, the utility says that it could add more units. The unit was commissioned in June, and has so far demonstrated 100 per cent availability.

The 75 kW unit is designed to help commercial and industrial facilities improve power quality and reduce the risk of outages. Honeywell believes that it could deploy more such units in India.

Napocor seeks $650m finance

The Philippines’ National Power Corp. (Napocor) will need around $650m to finance a national interconnection project that will link the grids of Luzon, Visayas and Mindanao. It is currently negotiating with the JBIC, the Asian Development Bank and other lending institutions for funding.

Of the amount required, $500m will go to the Leyte-Mindanao interconnection project. Napocor will raise $80-100m while the remainder will come from financial institutions.

160 MW Order

Gujurat State Energy Generation Ltd. has placed an order with Alstom Power for the construction of a 160 MW combined cycle power plant at Hariza. The plant will enter commercial operation in early 2002.

Alstom will deliver two 58 MW GT8C2 gas turbines, a steam turbine, two heat recovery boilers, electrical equipment, control and instrumentation and balance of plant equipment.