Maritza East I Power Plant Project

Active

In December 2005, AES Maritza East 1, a subsidiary of AES Corporation, secured finance to develop 670 MW cold fired Maritza East I Power Plant. The plant was to be located in Galabovo, 250 km south-east of Sofia, the capital city of Bulgaria. AES was the sole owner of the project. The project had a 15 year power purchase agreement, but a 35 year build owned and operate contract with the government of Bulgaria. The new facility was designed to comply with EU emission standards for coal-fired stations and to provide new capacity to replace old nuclear plants being decommissioned. The plant was to replace an existing 500MW of capacity, of which 300MW were already phased out and dismantled. Maritza East I Power Plant was a part of three Maritza plant projects replacing old nuclear plants being decommissioned under the agreement with EU. The third unit at the site - a joint venture between Enel and state power company NEK - was the subject of a Eu348 million financing in 2003. The second was state-owned. The total project cost was estimated at US$ 1.4 billion (Eu 1.1 billion). In 2005, financing was secured with a Eu 825 million debts from which the lead arrangers were BNP Paribas, Calyon and ING. The lead arrangers underwrote a third each of the Eu 711 million covered facilities, which the remaining Eu114 million coming direct from the EBRD's books as an A loan. The Eu 711 million debt was provided by an EBRD B loan of Eu 228 million, a Coface-covered tranche of Eu102 million, a Hermes-covered tranche of Eu 200 million, Eu 65 million in MIGA-covered debt, a Eu 48 million debt service reserve account letter of credit; a Eu20 million working capital facility; and an uncovered local bank facility of Eu 48 million. All of the above facilities have a tenor of 16 years with the four-year grace period that coal plant construction times demand. The plant was to be constructed by Alstom under a turnkey contract and was planned to be commissioned in 2009. Construction work started in late 2005. The plant became operational in June 2011. The project was initially awarded through an international tender to Access International, which signed an energy conversion agreement with Natsionalna Elektricheska Kompania (NEK) in October 1998. AES Corporation acquired full ownership of the project in 1999, and signed 15 year power purchase agreement with NEK, and 15 year coal supply with state owned mining company, Mini Maritza Iztok in 2001. The MIGA guarantee issued in 2006 totaled US$117.8 million and was held by Calyon (France), and AES Bulgaria Holdings BV (incorporated in Netherlands). The guarantee covered EUR 89 million of loans and interest on loans syndicated by Calyon of France, and EUR 10 million of equity investment by AES Bulgaria. The length of the guarantee was 16 years and covered: expropriation (loans only), war & civil disturbance (loan and equity). http://www.miga.org/projects/index.cfm?pid=649