Azerbaijan to be world’s first country to use ADB guarantees for project commercial financing
Baku, Fineko/abc.az. The process of raising extra commercial financing for the construction of thermal power station Canub (Southern) is under completion.
Informed sources say that Rafael Abbasov, the head of the Investment Department of Azerenerji (project customer) applied with a special message to the Asian Development Bank (ADB), which approved guarantees for commercial financing of this project from banks Societe Generale and CitiBank.
"Abbasov informed the ADB that the preparatory process on conclusion of agreements with the commercial banks and the ADB was under completion and the process is on schedule," the source said.
The Baku-based ADB resident office stated on the occasion of this project that technical details of the agreement are under coordination.
"According to our information, the process of drafting an agreement with the banks approaches to the end as well,” the ADB office said.
Earlier Abbasov stated to Fineko/abc.az that Azerbaijan could become the first country in the world to receive and use ADB guarantees for commercial financing of infrastructure project.
The agreements with commercial banks and ADB will be signed in single package. Azerenerji is ready to do that until 10 December.
This summer the government decided to decline from the additional commercial financing and guarantees, but then changed its plans due to new tactics of oil revenue managing.
Eventually, the government returned to the issue of raising approximately 220 million euro of extra financing from Societe Generale and CitiBank for the 13-year term with three years of payment by installments under ADB guarantees.
The Abu-Dhabi Development Fund approved extra 60 million euro for financing, and most probably those money will be spent as well.
The Islamic Development Bank has already extended a 134 million euro loan for Canub Project and the Fund OPEC for International Development (OFID) 20 million euro.
Another 300 million euro was covered by a 10-year term loan from Bayerische LB, Societe Generale and Credit Suisse.
Canub station is being built by local specialists on technologies of General Electric.
The station of mixed type will have generating capacity of 780 MW and its average efficiency will make up 42%.
In turn, Azerenerji’s president Etibar Pirverdiyev stated once that construction of the station is scheduled for completion by the end of the year.
"The cost of the station is estimated at 600 million manats. This will be a unique station that can operate on three types of fuel - gas, fuel oil and diesel fuel,” Pirverdiyev said. Construction began 4 years ago.
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