Tractebel invests in Turkey

Tractebel has acquired a $500m, 770 MW combined-cycle gas turbine power project which is under development near Ankara, Turkey.

The move gives the Belgian-based company the edge in a fast expanding market. Tractebel will purchase a 45 per cent stake in the build-own-operate (BOO) project from owners, Baymina, which has a 50 per cent share and is owned by International Power. The remaining half of the project is split between Bayindir, a Turkish conglomerate and Mimag, a Turkish engineering company, which own 45 and 5 per cent respectively.

Tractebel will build the fast-track power station, which is targeting a late 2003 deadline. Construction will be undertaken by VATech of Austria, with technical support from General Electric and Alstom, which will supply the steam turbine.

Baymina has signed a 15-year power purchase agreement with the Turkish utility TEAS and a natural gas supply contract with the Turkish gas supplier Botas. The BOO is one of five that has been offered by the Turkish state as part of a lucrative deal to entice foreign companies. Part of the package includes a US dollar link to the main contracts and a State Treasury Guarantee for the obligations of TEAS and Botas.

Driven by population growth and an increase in the country’s industrial base, the much needed project is part of Turkey’s plans to construct an additional 2000-2500 MW of power capacity over the next ten years to meet increased demand.

The plant will connect via a substation to Turkey’s main 380 kV transmission system linking the south-east and west of the country, and to transmission circuits to the east, west and north. The plant has the added benefit of its Ankara base, which is Turkey’s main natural gas hub.

Africa seeks $10bn aid for power sector

West Africa needs around $10bn to help establish its power generation sector as well as upgrade and renew high voltage transmission lines over the next 15 years, according to a document drawn up by Ecowas (Economic Community of West African States).

The master plan document was approved by the Ecowas energy ministers. It detailed needs of an estimated $5.8bn for a ten-fold increase in existing transmission capacity and a six-fold increase in installed generation capacity.

The document listed that more than 28 000 MW of new generating capacity is needed to be added in the sub-region for the period 2001 to 2020. It added that west Africa’s power sector would struggle to raise such large sums of capital in the near future in view of its small size. Political risk was highlighted by the document as being a major factor in detering would-be investors.

The report also highlighted the benefits that an updated power system would bring, including lower system costs, increased capacity to improve reliability and quality, and an improved base for commercial and industrial growth.

Poland axes Iberdrola’s G8 drive

Poland’s treasury ministry has announced that Iberdrola has lost the right to purchase a 25 per cent share in the country’s largest power utility group, G8, worth an estimated $480m.

Talks broke down due to disagreements with the G8 trade unions on work force guarantees. Other bidders in the running that the Polish state is now likely to negotiate with are Elektrim, E.On and Electrabel.

Meanwhile, a consortium of Electricité de France (EDF) and EnBW gained control of Elektrownia Rybnik through acquiring an additional 15 per cent from the Polish state.

EdF shelled out $171.4m for its 51 per cent share and promised to invest $136m by the end of 2010 to increase the plant’s modernization and capital.

Czech out the shortlist

The Czech government has announced its shortlist for next year’s privatization of its gas and electricity sectors. The exclusion of E.On from the list suprised many analysts.

The German energy giant failed to make the cut in the electricity tender, which left the contest open to less competition. The list comprises state-owned Electricité de France (EDF), Electrabel, and two consortia: NRG with International Power; and Enel with Iberdrola. The preferred bidder is expected to be announced by the end of this year.

The Czechs government has made it clear that it wants to speed up the process by concluding the tenders for stakes in the electricity and gas distribution and production companies by year-end.

The state included Duke Energy, E.On, Edison, the Czech Republic’s Gas Invest and the consortia of Gaz de France with Ruhrgas and Italy’s Snam, Germany’s RWE Gas and Wintershall, for the gas privatization. The privatizations are set to be the biggest equity sales in the Czech republic and are intended to generate billions of koruna for the cash-starved government.

Advising the government on its gas holdings sale is ABN AMRO, while Deloitte & Touche will advise on the electricity sale.

News digest

Bahrain: Bahrain has acquired a $100m bridge finance facility from Gulf International Bank to part finance phase II of Hidd Power Station. The loan agreement was signed on behalf of the Bahrain government by Abdullah Hassan Saif, finance and economy minister.

Hungary: Liberalizing its electricity sector is high on Hungary’s agenda as it looks to achieve 33 per cent market opening from 2003 and complete liberalization by 2010. If a bill is passed this autumn, some 200 of Hungary’s largest electricity consumers will soon be free to choose their supplier.

Hungary: The US energy group, NRG, has acquired the Hungarian power generation and distribution enterprises Csepeli Eromu and Csepeli Aramtermelo based in Budapest, and has indicated its intention of making new acquisitions in the country as well as becoming involved in the privatization of the Polish and Slovakian energy sectors. Csepeli Aramtermelo reported electricity sales of $50m last year and this is set to rise to $90m this year. The power plant acquired by NRG – Csepeli II Eromu – has installed capacity of 389 MW.

Kenya: The US Trade and Development Agency has granted Kenya Sh39m ($0.5m) to fund feasibility studies for four new power transmission projects by the Kenya Power and Lighting Company. The grant will explore the feasibility of the construction of transmission lines between Kamburu and Meru, Olkaria and Lessos to Kisumu.

Kuwait: Parsons Brinckerhoff International, an engineering, planning and construction management organization, has been awarded a contract to provide consulting engineering services for the development of new power stations in Kuwait. The contract will comprise a 2500 MW thermal power plant at Az-zour North, south of Kuwait.

Lithuania: The commissioner responsible for the European Union enlargement, Guenter Verheugen, has said that the second reactor of the Ignalina nuclear power plant in Lithuania will have to be phased out by 2009. Mr Verheugen added that Lithuanian parliamentarians would make no exceptions over the closure of Ignalina because “an accident in such a power plant would affect not only the residents of the country but also those of all Europe”.

Russia: The European Bank for Reconstruction and Development is lending $100m to RAO UES (Unified Energy System of Russia) to help the company set in motion a government-approved plan to restructure the country’s power sector. Leonid Melamed, deputy chairman of RAO UES, said, “The support of the international investment community towards reform of this key sector of the Russion economy is vital.”