| EBRD in $300 million loan to LUKOIL for its power subsidiary |
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09/11/2009 15:26 (824 Day 22:09 minutes ago) | |||||
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The FINANCIAL -- The EBRD is extending a long-term loan of up to $300 million to help LUKOIL fund modernisation of its TGK-8 electricity generating subsidiary in southern Russia.
A new state-of-the-art unit will dramatically increase the energy efficiency of the existing Krasnodar Combined Heat and Power (CHP) plant while cutting greenhouse gas emissions by 750,000 tonnes a year.
"The transaction, the EBRD’s third in the Russian power sector this year, was signed in MOSCOW today. The initial tranche will total $150 million. Under the terms of the transaction LUKOIL has a possibility to raise a second tranche of up to $150 million within 24 months from the signing date of the first facility," EBRD informs.
The borrower is OAO ”LUKOIL”, an established EBRD client and the world’s second largest private oil company as measured by proven reserves. LUKOIL shares are listed on the London Stock Exchange, as well as Russia’s MICEX and RTS exchanges.
This loan will support LUKOIL in meeting the investment obligations made at the time of the privatisation of TGK-8, thus highlighting how the restructuring of the power sector contributes to the renewal of key infrastructure which the country needs so badly, said EBRD President Thomas Mirow at the signing.
The EBRD’s seven-year loan underscores two other key priorities for the Bank:
• replacing old and wasteful generating equipment with advanced technology making a tangible impact on the environment and improving energy efficiency parameters;
The EBRD has been involved in the reform of what is the world’s fourth largest power sector since 2001. This loan pushes to over $1.5 billion the amount invested by the Bank in 13 Russian power transactions over the last eight years, including this one.
Among Russia’s energy consumers, companies operating in the power sector offer the greatest potential in terms of energy efficiency gains and greenhouse gas emission cuts.
TGK-8 is the principal electricity and heat generator in Russia’s Southern Federal District. Once completed, the new unit of the Krasnodar CHP plant will achieve thermal efficiency of 58 percent against the 35 percent score of the existing units.
This is the second combined cycle gas turbine unit to be financed by the EBRD in Russia this year. Last February, the Bank extended a €120 million loan to regional wholesale generator Enel OGK-5, to fund the construction of another 410 MW combined cycle unit at its Nevinnomysskaya power plant, also in southern Russia.
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