Sharikat Kahraba Skikda

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Sharikat Kahraba Skikda (SKS), a special purpose company created in May 2003, developed an 825 MW greenfield power plant in the Algerian coastal city of Skikda on a build-own-operate (BOO) basis. This BOO contract was the result of Government of Algeria’s effort to reform the utilities sector and to gradually open it to competition. State-owned power company, Sonelgaz, planned to add 7100 MW of new capacity with private partnership by 2010. Sharikat Kahraba Skikda was a joint venture between Canada’s SNC-Lavalin (25%) and three Algerian state-owned companies (75%) – Sonelgaz, Sonatrach and Algerian Energy Company. The total cost of the project was estimated at US$ 562 million. The project reached financial closure in Februray 2004, with a debt equity ratio of 70:30. Societe Generale Corporate & Investment Banking arranged the US$ 382 million financing guaranteed by the Export-Import Bank of the United States (US$ 192 million) and Export Development Canada (EDC). SNC-Lavalin was the sole engineering, procurement and construction (EPC) contractor for the project. SNC-Lavalin was also awarded a 12 year operation and maintenance contract, with a possibility of an additional 12 year extension. SKS was scheduled to be commissioned in the first quarter of 2006. Email from Richard Masse of SNC Lavalin indicates the company did not in fact hold an equity stake in SKS. None