Gebze CCGT Power Project

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Gebze CCGT power project was an 865MW natural gas-fired combined cycle power plant in Kocaeli, Gebze, located in an industrial zone near Istanbul in Turkey. The plant was to be developed on merchant basis in the liberalized Turkish electricity market. Yeni Elektrik Uretim AS (Yeni) was the project company created to implement and operate the project. The project was located in the Gebze region where demand for electricity was growing at a rate that was 40% higher than national demand. As it often happened in Turkish power, there was no gas supply agreement at signing. Therefore, gas supply agreements with alternative suppliers were possible during the project, depending on the market conditions. Also, the power plant was to be equipped with AE94.3A gas turbines and was designed to quickly adapt to change in demand, operating as a "cycling" plant". In 2008, Yeni was granted a generation license for 49 years. Yeni was a joint venture between Belgium’s Unit Investment NV (Unit) with 60% and Italian Ansaldo Energia SpA (Ansaldo) with the remaining 40%. Ansaldo Energia was 55% controlled by Italian defense and aerospace group Finmeccanica and 45% owned by private equity US fund First Reserve Corporation. Ansaldo Energia was also the EPC contractor during the project, building and maintaining the plant "under a performance-based, completion type contract and associated long term services," thus bearing delivery risk and providing performance and availability guarantees. During the construction phase, there was also some sponsor support for other risks. In 2010, Ansaldo Energia, won a competitive EPC tender to build the plant beating off rival bids from Alstom, Siemens, Gama, Mitsubishi and Itochu. The sale was approved by Turkey's competition agency and the energy regulator EPDK. The electricity to be produced by the power plant would be sold to the wholesale market. The total project cost for the plant was estimated to be US$1 billion. On July 12 2011, Yeni Elektrik Uretim AS finalized the financing for the 865MW gas-fired combined cycle power. The project debt was financed by four Turkish banks, Yapi Kredi (US$175 million), Is Bank (US$175 million), Garanti Bank (US$175 million) and Vakif Bank (US$175 million), which together supplied a US$700m 14-year (including a three-and-a-half year grace period) term loan and an US$80m letter of guarantee facility to Yeni. The project costs estimated at around US$1bn on a debt to equity basis of 70:30. Other actors involved in the project were Clifford Chance, Herguner Bilgen Ozeke Law Partnership, Tractabel Engineering, Gifford, in aiding the developer. The lenders were assisted by White and Case, Cakmak, ADG, Deloitte, Fichtner, and JLT, with financial modelling from Ernst and Young and Fichtner being the lenders engineer. The first $20 million debt drawdown occurred on 12 July 2011 and, with construction underway, a further $112 million was drawn on 13 July 2011. The completion of the plant was expected to 2013. At closing there were no PPA agreements or revenue guarantees set in place, and as such the lenders were taking merchant risk on the project. In April 2013, the operation & maintenance contract of the project was awarded to a joint venture between ESB International (Irish) and Unit Investment NV (Turkish owned, Dutch registered). The contract was valued at $39.3 million. http://www.re-database.com/index.php/homepage/press-releases/wind-energy/234-yeni-elektrik-865-mw-ccgt-merchant-power-plant-reaches-financial-close