Hefei No. 2 Coal-Fired Power Plant

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Three Singapore-based companies have teamed up with a Chinese Consortium to build a 604-MW (2x302-MW) coal-fired power plant in Hefei, Anhui Province. Three Singaporean companies, Singapore Power International (a subsidiary of Singapore Power), Tropical Excellence Infrastructure (a subsidiary of Government of Singapore Investment) and United Power have formed a joint venture, United Power Corporation Pte. Ltd. United Power Corporation Pte. Ltd will own 49% of the project company, Anhui Hefei United Power Generation Company. The remaining 51% is distributed between four Chinese companies as follows: East China Power Group: 20%; Anhui Electric Power Development Company: 16%; Anhui Electric Power Co.: 7.5% and Hefei Construction and Investment Co: 7.5%. The plant will sell its output of around 4 GWh per year to the Anhui Electric Power Co (AEPC) when it enters commercial service in 2000. AEPC will also operate the plant and take responsibility for fuel supply, with the company's various obligations being supported by a performance guarantee from the East China Electric Power Group Corp. Turnkey construction of the plant has been awarded to Swiss-Swedish ABB Kraftwerke. $144m for the project is equity financed and the remainder debt financed. The parties reached financial closure on June 25, 1997. The contract included a $75 million limited recourse loan arranged by Singapore's OCBC Bank and DBS Bank, and the Singapore arm of the Bank of China. The margin on the 10 year loan is 210 bp over LIBOR before completion and 190 bp after completion. KfW and Hermes provided a direct loan of $160m. China Development Bank and State Development Bank are contributing $184m. As of September 2002, the project company was having problems meeting its projected cashflow due to lower tariff rates which may result in its inability to meet debt repayments. The sponsors were in discussions with various government bodies who were reviewing the tariff rates. None None