Sheberghan Gas to Power Project

closed

The objective of the Gas-to-Power Project for the Islamic Republic of Afghanistan is to increase the amount of electricity generated in Afghanistan and to leverage private financing for the country's energy sector. The project has three components. A) The proposed Project comprises the development, financing, design, construction and operation of a 40MW green-field gas-to-power plant as an IPP on a Build-Own-Operate basis. It will be implemented by Bayat Power Electricity Services Distributor Company ("Project Company"), a Special Purpose Company established by Bayat Group. The Project Company is 100 per cent owned by Unique Market Holdings Ltd., a British Virgin Island12 registered company. The latter is 100 per cent owned by Bayat Energy Group LLC, a Delaware registered company, whose ultimate owner is Dr. Ehsanollah Bayat. As a whole, the Bayat Group has been operating in Afghanistan for 17 years, and owns and operates several enterprises in Afghanistan, primarily in the telecommunications and media sector, but it has also engaged in oil and gas exploration, and production. The corporate structure is further detailed in Figure 5 of this document. B) The power plant under the proposed Project will be located 20 km east of Sheberghan, and approximately 1 km west of the amine treatment plant (operated by Afghan Gas Enterprise (AGE)) at the Yatimtaq gas field in northwestern Afghanistan. The specific plot of land, on which the project site is situated, is Government owned, and has been leased to the Project Company under a lease agreement signed on 31 July 2018, coterminous with the initial term of the PPA (i.e., five years after the plant's commercial operations date). Due to its location, the power plant will supply power to Jawzjan (Sheberghan is its center), Faryarb, Sar-i-pul and other parts of the provinces in the Balkh region. It is consistent with the 2013 Power Sector Master Plan, which identifies this as the least cost option for increased domestic energy generation (up to 150 MW of installed capacity by means of gas-fired power plants). The Project Company has entered into a five-year take-or-pay PPA with DABS, under which it will sell electricity at a fixed (non-indexed) tariff of US cents 7.5/kWh. This is slightly higher compared to the average cost of imported electricity, which ranges from US cents 5.5/kWh to US cents 6.5/kWh over a five-year period due to indexation, but is lower compared to the recently closed Kandahar Solar Project, which has a tariff of US cents 8.5/kWh. C) The proposed Project will consist of one 40MW mobile gas turbine generator designed to burn natural gas. The balance of the plant will include a gas distribution and filtration system. The Project company has selected Siemens to supply this gas turbine. The respective generation units were shipped from Houston and arrived on site in Sheberghan in early July 2019 and were installed in early September 2019. The Project Company has identified a contractor that will undertake the operation and maintenance (O&M) of the power plant.