TE-TO Skopje

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In October 2005, TE-TO Skopje, a joint venture company comprising Toplifikacija AD Skopje (20%) and Itera Holding Ltd. [Russian Federation] (80%), signed an agreement with the Government of Macedonia to develop a 250 MW gas-fired combined heat and power plant in Skopje on a build-own-operate (BOO) basis. The project was the first independent power producer (IPP) in the country. The total project cost was estimated at EUR170 million (US$233 million), and was funded on a 70/30 debt-to-equity basis. The equity was funded in line with the sponsors' shares in the project company. In March 2007, before the project reached financial closure, Sintez Group [Russian Federation] - through its wholly-owned subsidiary Project Management Consulting Ltd. - purchased a 60% stake in the project company from Itera Holding. This resulted in a shareholding structure of Sintez Group (60%), Toplifikacija AD Skopje (20%) and Itera (20%). Financial closure was reached on October 19, 2007, with the signing of the long-term project financing. The long-term debt, which was arranged by Landesbank Berlin (LBB), consisted of a EUR106.02 million (US$145.25 million) export credit agency (ECA) covered loan and a EUR14 million (US$19.18 million) commercial loan. The ECA covered loan had a tenor of 12.5 years and was repayable in 20 consecutive semi-annual installments. The EPC contractors for the project were Gama Power System [Turkey] and Alstom [Switzerland]. The ECA loan was based on the payment claims of subcontractors of Gama Power System in Poland and Germany. The ECA loan consisted of contributions from three ECAs: Euler Hermes [Germany], Kuke [Poland] and Serv [Switzerland]. The loan comprised nine tranches: - Tranche A: EUR31.025 million for 85% of the German portion (Euler Hermes cover) - Tranche B: EUR2.58 million for Euler Hermes costs (Euler Hermes covered) - Tranche C: EUR3.4 million for interest during construction for tranches A and B (Euler Hermes covered) - Tranche D: EUR15.385 million for 85% of the Polish portion (Kuke covered) - Tranche E: EUR2.1 million for Kuke costs (Kuke covered) - Tranche F: EUR2 million for interest during construction for tranches D and E (Kuke covered) - Tranche G: EUR40.48 million for 85% of Swiss portion (Serv covered) - Tranche H: EUR4.45 million for Serv costs (Serv covered) - Tranche I: EUR4.5 million for interest during construction for tranches G and H (Serv covered) Tranches G-I were partially reinsured by Euler Hermes and Kuke. Construction began in April 2007 after the sponsors made the first payment under the EPC contract to Gama and Alstom. The plant, which was to comprise a single gas turbine and steam turbine, with a maximum installed capacity of 250 MWe and optimal thermal capacity in CHP mode of 160 MW, was scheduled to take 27 months to complete, but delays with the permitting process for a connection to the 110-kV grid as well as slow progress by the EPC contractor meant that the project was not expected to be commissioned until September 2010. The construction of the plant was completed in November 2010 and a trial operation took place in June 2011. Project will become operatioanl soon