Karaganda Coal Fired Power Plants (TETS 1 & TETS 3)

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Karangada TETS1 and TETS3 are two coal fired power plants located in Karangada, with an installed electric capacity of 470MW and a heat capacity of 1500MW. The facility was operating at 50% of its capacity when the government partially privatized it in July 1997. The government signed an agreement to sell up to a 70% stake to Israel-based Ormat Turbines. Under the deal, Ormat paid an initial $1.3 million to acquire a 30% stake. It took over control of the plant with an option to buy up to 70% stake. Ormat would invest up to $25 million in upgrading the plant and receive 70% ownership. In 1998, Ormat and London-based, National Power set up Karaganda Power Company (KPC), a project company that would own, operate and develop the power generation facility and its associated district heating system. In September, 1998 they completed the purchase of 70% ownership in the power generation facility and of an electricity transmission and distribution company, Karaganda Regional Electricity (REC). National Power purchased a 50% stake in Karaganda Power Company for $20 million from Ormat and a 35% stake in REC. National Power and Ormat were to invest jointly up to $110-million progressively over the next three years to refurbish and extend the generating plant, district heating and distribution systems. In Nov. 1999, National Power announced the split of its international and domestic operations, and International Power plc was created. In December 1999, EBRD approved a US$40m loan package for the renovation of the two power plants. The package involved a US$22m A loan for 11 years and US$18m B loan for 7 years. In the first half of 2002, International Power plc sold its 50% interest in Karaganda Power Company (KPC) and Karaganda Regional Electricity Company to Ormat, which became the sole owner of the companies. In September 2002, UK-based Independent Power Corporation (IPC), through its subsidiary Integrated Energy Limited, purchased a 100% interest in Karaganda Power Company (KPC) and Karaganda Regional Electricity Company from Ormat. It later sold its interest in 2003. See new sponsor after 2003