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DABHOL PROJECT ACHIEVES FINANCIAL CLOSE; RESUMES CONSTRUCTION
FOR IMMEDIATE RELEASE: Tuesday, December 10, 1996
HOUSTON -- Enron today announced that financing has closed and construction has resumed on Phase I of the Dabhol Power Project in India. Early last week, the Bombay High Court dismissed a lawsuit against the Dabhol Power Company (DPC), and as a result of this ruling, all approvals and clearances granted to the project remain legally binding. This ruling cleared the way for DPC to close financing and issue notice to proceed with construction of the 826 megawatt (gross) 740 megawatt (net), combined cycle power plant in the State of Maharashtra.
“We have been working toward this accomplishment for some time and we are extremely pleased that it has occurred,” said Kenneth L. Lay, Chairman and CEO of Enron. “Our goal now is focusing on completing construction. With nearly half of the 4,000 workers who will construct this plant on site immediately, we are well-positioned to meet this goal.”
The Dabhol project is a joint venture of Enron, which owns 80 percent of the project, and GE Capital and Bechtel Enterprises, Inc., with each owning 10 percent.
Bechtel Power Corporation is constructing the facility, and the equipment is being supplied by affiliates of General Electric Company. Enron will operate the plant. Electricity produced will be sold to the Maharashtra State Electricity Board under a 20-year power purchase agreement.
A commercial bank syndicate led by Bank of America and ABN Amro is providing US$150 million of funding to the project; the Overseas Private Investment Corp. (OPIC) is providing US$100 million; U.S. Export-Import Bank is providing US$298 million, based on a guarantee from a group of Indian financial institutions led by Industrial Development Bank of India (IDBI); and IDBI also is the lead arranger for a rupee loan provided by Indian financial institutions which equates to US$96 million. The remainder of the project cost will be funded through owners’ equity in the proportions of 80 percent Enron, 10 percent Bechtel and 10 percent GE. Phase I of the Dabhol Project is valued at approximately $1 billion.
DPC intends to expand this project, ultimately bringing total plant size to 2,450 megawatts gross, 2,184 megawatts net. Combined cost estimates for Phases I and II and the related liquefied natural gas receiving terminal are expected to make this the largest single foreign investment in India’s energy sector.
Enron, one of the world’s largest integrated natural gas and electricity companies with approximately $15 billion in assets, operates one of the largest natural gas transmission systems in the world; is the largest purchaser and marketer of natural gas and the largest non-regulated marketer of electricity in North America; markets natural gas liquids worldwide; manages the largest portfolio of fixed-price natural gas risk management contracts in the world; is among the leading entities arranging new capital to the energy industry; owns 58 percent of Enron Oil & Gas Company, one of the largest independent (non-integrated) exploration and production companies in the United States; owns 59 percent of Enron Global Power & Pipelines L.L.C., which is owner and manager of operating power plants and natural gas pipelines around the world; and is one of the largest independent developers and producers of electricity in the world. Enron is traded under the ticker symbol, "ENE.”
Bechtel Enterprises is the development, financing and ownership affiliate of Bechtel Group, Inc., one of the world’s premier engineering, construction and project management companies. Since 1990, it has arranged more than $10.5 billion in project financings worldwide and has ownership interests in 23 power projects in construction or operation, with a total generating capacity of 5,778 megawatts. The Bechtel organization has been at the center of electric power and cogeneration development since the 1940s, having participated in the building of more than 450 power plants worldwide with an aggregate generating capacity of more than 250,000 megawatts.
GE Capital Services, with assets of over US$185 billion, is a global, diversified financial services company with 26 specialized businesses. A wholly-owned subsidiary of General Electric Company, GE Capital Services, based in Stamford, CT., provides equipment management, mid-market and specialized financing, specialty insurance and a variety of consumer services, such as car leasing, home mortgages and credit cards, to businesses and individuals around the world. GE is a diversified manufacturing, technology and services company with operations worldwide.
For additional information please contact:
Kelly Kimberly
(713) 853-5377
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