UCH-II Power (Private) Limited

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UCH-II Power (Private) Limited was created to build and operate Uch-2 project, a 404 MW combined-cycle gas power plant in Dera Murad Jamali, Balochistan province, Pakistan. The project consisted of two GE9E gas turbines and one steam turbine. Natural Gas for the plant was to be derived from the Uch gas field, which is 47km away, under a gas supply agreement with the state-owned Oil & Gas Development Company. For Uch-II, 15 new wells were developed by the state-owned Oil and Gas Development Company Limited (OGDCL). The Uch-2 plant was to be built adjacent to the 586 MW Uch-1 plant which built in 1996 and operational since 2000. Uch-1 was also owned by International Power (75% stake). UCH-II Power (Private) Limited was 100% owned by International Power of the UK. The Project was developed under the 2002 Power Policy and, consequently, was to be undertaken under a 25 year build-own-and-operate structure. All electricity that would be produced by the Project would be sold to the National Transmission and Dispatch Company (“NTDC”) under a 25-year Power Purchase Agreement, backed by a GOP Guarantee. An Implementation Agreement would be signed prior to financial close that would entail the GOP’s support for the project and would also lay out the rights and obligations of all parties. The tariff structure was approved by the National Electric Power Regulatory Authority - Pakistan's power sector regulator. The total project cost was US$ 500 million. Financial close was reached in January 2011 with debt equity ratio of 75:25. The sponsors committed to investment US$125 million through equity. Debt financing of US$375 million to the project was provided by foreign lenders including Asian Development Bank (ADB) through two loans (a US$49.9 million and a Euro 37.16 million); International Finance Corporation (IFC) with US$100 million A-loan; Islamic Development Bank (IDB) and Export-Import Bank of Korea (KEXIM). In 2011 ADB was negotiating a US$50 million political risk guarantee for the project. The project was expected to be commissioned by the end of 2013. Equity stake is 100% according to description, but was reported as 75%. I believe it was a mistake, as UCH 1 was reportedly 75% owned by IP.