EX-IM BANK APPROVES $523 MILLION FOR TWO TURKISH POWER PROJECTS
The Export-Import Bank of the United States (Ex-Im Bank) has approved a total of $523 million in financing to support the export of US equipment and services to build two power plants in Turkey - the Gebze and Adapazari electricity generation projects. The primary US exporters are Bechtel Power Corp. and General Electric Co. The project sponsors are InterGen, Boston, MA, owned by Bechtel Enterprises Inc. and Shell Generating Ltd.; and Enka Insaat ve Sanayi A.S., one of the largest construction companies in Turkey. The transactions are limited recourse project financings in which repayment comes from project revenues. The Board approved:
- a $334 million long-term guarantee to finance US exports to the Gebze Electricity Generation project company for the design, procurement, construction and ownership of a 1554-megawatt gas-fired combined-cycle power plant located in Adapazari about 100 miles east of Istanbul.
- a $189 million long-term guarantee to finance US exports for the Adapazari Electricity Generation project company for design, procurement, construction and ownership of a 777-megawatt gas-fired combined cycle power plant in Adapazari.
The financing covers both the construction and operating periods of the projects, a first for Ex-Im Bank in Turkey. The plants are being constructed under the build-own-operate (BOO) model for private power development. Ex-Im Bank is expected to consider financing for a third plant, the Izmir power project, in the next few months. Together the three projects will provide Turkey with an additional 17% of power capacity and provide the lowest cost electricity available in Turkey.
These transactions realize a high Ex-Im Bank priority — to take on more creditworthy risks, such as construction risk, on projects that are important to Turkey and also support US jobs, said Ex-Im Bank Chairman James A. Harmon. We are pleased to be cooperating with other export credit agencies and US trade agencies on these projects.
The US Overseas Private Investment Corporation (OPIC) is providing direct loans for the two projects and Germany's and Belgium's official export credit agencies are providing comprehensive insurance.
Bechtel and Enka, owners of the project companies, are jointly responsible for the construction of the projects under engineering and procurement contracts. Ex-Im Bank will provide comprehensive guarantees throughout the projects' construction and operation periods, with an option for an Ex-Im Bank loan after completion.
The Ex-Im Bank financing will cover procurement of US goods and services, interest during construction, and eligible local costs. ABN Amro, Chicago, is the guaranteed lender. Financial close of the projects is expected in July.
Ex-Im Bank is an independent US government agency that helps finance the sale of US exports to developing markets throughout the world by providing loans, guarantees, and insurance. In fiscal year 1999, Ex-Im Bank approved $422 million in financing in support of US exports to Turkey, and helped to finance nearly $17 billion of US exports worldwide.