Financing secured for Dabhol II

Enron Corp. has secured financing for the $1.9bn second phase of the Dabhol power plant in India. The announcement comes just as the company is preparing to commission the first phase of the $3.1bn project.

The $1.87bn financing includes five loans totalling $1.4bn and equity investment of $452m. The Industrial Development Bank of India acted as lead arranger of rupee loans totalling $333m. Commercial banks acting as coordinators for a $497m syndicated loan include SBI, ABN Amro, Credit Suisse First Boston and Citibank.

The second phase of the project will generate 1624 MW of power using natural gas from Oman. “Financial close of the second phase realises Enron`s goal of bringing natural gas to the west coast of India,” said Joseph W. Sutton, chairman and CEO of Enron Inter-national. Commercial operation is scheduled for late 2001.

The first phase of Dabhol, totalling 826 MW, was expected to commence commercial operation in May 1999. This unit will run on naphtha or distillate until the second phase is complete. Power produced will be sold to the Maharashtra State Electricity Board under a 20 year agreement.

• A private sector power project proposal in India has run into controversy because of the involvement of Enron as the major shareholder. Local developer Kannur Power Project Ltd. is said to be seeking other foreign partners for the 513 MW power plant at Eranavu.