Asia Private Power Limited (APPL)-Swap

completed

Summary Of Project Information (SPI)Project NameSri Lanka - Asia Power (Private) LimitedRegionAsiaSectorProject No.7979Projected Board DateNovember 29, 1996Company NameAsia Power (Private) Limited (APPL)Technical Partner and/or Major Shareholders Klockner Humboldt Deutz, Great Britain Ltd. (31.8%), Nissho Iwai, Japan (18.27%) and Burmeister & Wain Scandinavian Contractor, Denmark (6.8%).Project Cost Including proposed IFC investment US$5 million loan equivalent exposure to undertake a swap.Location of project and Description of site The plant is located about 20 km from the capital city of Colombo in South Western Sri Lanka.Description of Company and Purpose of Project The objective of this Project is to allow the APPL to hedge its interest rate and currency risk. The APPL has requested that IFC arrange an interest rate swap on the IFC ‘B’ loan in order to effectively convert this loan from variable rate into US dollar fixed rate. In addition, since the APPL intends to borrow US$10 million equivalent from DEG, which may be denominated in Deutschemarks, they have requested that IFC arrange a currency swap into fixed rate US dollars so as to reduce the resultant currency risk. These swap transactions will be priced on the basis of standard IFC pricing guidelines for client risk management transactions. IFC’s total exposure under these swap transactions is estimated at approximately US$2 million. This Project will further support the developmental initiatives cited in IFC’s previous investment in the Project. Currency and interest rate risk management would improve the stability of the Company’s future cashflows and enhance its economic viability.Environmental Category and Issues The proposed transaction is of a financial nature only, and accordingly is classified as a category C Project according to IFC’s environmental review guidelines and procedures. No further environmental review is required.Date SPI sent to PIC November 14, 1996For Additional Information contact: Corporate Relations Unit -telephone: (202) 473-7711facsimile: (202) 676-0365Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).