AES-3C Maritza East 1 EOOD

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MIGA has provided AES Horizons, Ltd., of the United Kingdom, with a guarantee for $20 million to cover part of a $223 million equity investment in the Maritza East 1 power project in Bulgaria. The coverage is against expropriation and breach of contract risk, and extends for fifteen years. The project, MIGA's first in Bulgaria's energy sector, involves the construction of a new 670 MW thermal facility near the country's largest lignite mines, some 250 km southeast of Sofia. This plant is part of Bulgaria's strategy to replace life expired Soviet-built power plants. The project is one of the first under a new national strategy to make electricity supply more efficient and cost-effective by using inexpensive, indigenous fuel. The strategy entails not only the break-up of the state's electricity monopoly, but also the gradual replacement of old, costly, and environmentally unsafe plants. The investment follows an international tender carried out in 1998 for a 15-year contract to build, own and operate the plant with power sold to the stateowned electricity company. The construction period is expected to be three years. The project is expected to supply 6 percent of Bulgaria's energy needs by 2007, and to be one of the lowest cost producers in the country, and probably the lowest cost new capacity option. The plant will also be the cleanest coal fired plant in Bulgaria and will be among the cleanest in Europe. The plant will employ up to 2,500 people during construction, and up to 200 during operation. Training will be an integral part of the project. More than $150 million is expected to be spent locally on the procurement of goods.

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