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FINANCING COMPLETE, CONSTRUCTION COMMENCES ON SECOND PHASE OF DABHOL POWER PROJECT
FOR IMMEDIATE RELEASE: Thursday, May 06, 1999
HOUSTON – Enron International, a wholly owned subsidiary of Enron Corp., announced today the financial close of the US $1.87 billion second phase of the Dabhol Power project, located in the state of Maharashtra, India. Construction on the 1,624 megawatt (gross) second phase will begin immediately.
"This is a truly remarkable accomplishment," said Joseph W. Sutton, chairman and CEO of Enron International. "We are extremely pleased to complete the largest energy infrastructure project financing in India. This is a complex project and the strong combination of Indian and international financial institutions and project partners clearly demonstrates Enron’s and India’s ability to complete large infrastructure projects."
The primary construction contractors for the second phase are affiliates of Enron, Bechtel and GE. The second phase will use natural gas with long term supplies secured from Oman and Abu Dhabi. Commercial operation of the second phase is scheduled to occur in late 2001.
"Financial close of the second phase realizes Enron’s goal of bringing natural gas to the West Coast of India," added Mr. Sutton. "We are proud to have Dabhol as Enron’s flagship project in India and look forward to participating in future integrated energy opportunities in the country."
The US $1.87 billion financing includes five loans totaling US $1.414 billion and an equity investment totaling US $452 million.
Indian financial institutions, with the Industrial Development Bank of India (IDBI) acting as lead arranger, provided rupee loans equivalent to US $333 million. The participants in the rupee loans are IDBI, ICICI Ltd., State Bank of India (SBI), the Industrial Finance Company of India Ltd. and Canara Bank.
Commercial banks, acting as global coordinators for a US $497 million syndicated loan are SBI, ABN AMRO, Credit Suisse First Boston (CSFB), ANZ Investment Bank and Citibank N.A. Canara Bank, Bank of America, Development Bank of Singapore and Credit Lyonnais acted as senior lead arrangers for this loan. The Overseas Private Investment Corporation (OPIC) also provided US $60 million in project finance loans.
An export credit loan of US $433 million was arranged by the Japanese Export Credit Agency (ECA) providing US $258 million and commercial banks providing US $175 million. The commercial banks are insured by the Japanese Ministry of International Trade and Industry (MITI). Fuji Bank is the agent for the US $433 million loan from the Japanese ECA. In addition, an export credit of US $90.8 million was provided by a syndicate loan of US $90.8 million from commercial banks. This loan is insured by Office Nationale du Ducroire, Belgium (OND), and ABN AMRO is the agent for the commercial banks providing this loan. Both export credits were provided guarantees by Indian financial institutions.
The first phase of the project, 826 megawatts (gross), completed financing in December 1996 and is expected to commence commercial operation in May 1999. A multi-fuel facility, the plant is capable of using either naphtha or distillate in the first phase and will use natural gas once the second phase is complete. Electricity produced will be sold to the Maharashtra State Electricity Board (MSEB) under a 20-year power purchase agreement.
The first phase is a joint venture among affiliates of Enron (50 percent), MSEB (30 percent), Bechtel Enterprises Holdings, Inc. (10 percent) and GE Capital Structured Finance Group (10 percent). Partners in the second phase and their current ownership interests are Enron (80 percent), Bechtel Enterprises Holdings, Inc. (10 percent), and GE Capital Structured Finance Group (10 percent). MSEB has the option to acquire 30 percent of the second phase of the project from Enron’s current 80 percent interest.
Enron is one of the world's leading integrated electricity and natural gas companies. The company, which owns approximately $30 billion in energy related assets, produces electricity and natural gas, develops, constructs and operates energy and water facilities worldwide and delivers physical commodities and risk management and financial services to customers around the world. Enron's Internet address is www.enron.com, and the stock is traded under the ticker symbol, "ENE."
Bechtel Enterprises Holdings, Inc. is the development, financing and ownership arm of the Bechtel organization, a premier engineering, construction and project management company. It is a leader in the privatized infrastructure market having developed more than 40 projects in the power generation, water and wastewater, transportation, pipelines and telecommunications sectors. Since 1990 alone, it has participated in project financings totaling more than $15.5 billion. Bechtel’s Internet address is www.bechtel.com.
GE Capital Structured Finance Group is an investor and provider of innovative financial solutions for clients in the global energy, commercial and industrial, communications, and transportation sectors. In the past five years, the company has structured and financed more than 200 transactions worth over US $8 billion and has US $10 billion in assets. The Structured Finance Group draws on the strength of GE Capital, a global, diversified financial services company with assets of over US $300 billion, and General Electric Company, a diversified manufacturing, technology and services company with operations worldwide. GE Capital Structured Finance Group’s Internet address is www.sfg.ge.com.
The Maharashtra State Electricity Board is a statutory body created by the Government of Maharashtra under the Supply Act 1948. MSEB came into existence with the formation of the state in 1960. MSEB is responsible for the integrated development of power generation, transmission and distribution in the entire state. It has 12,257 megawatts installed capacity, which is highest in the country. Of this, 70 percent electricity is generated by MSEB.
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For additional information please contact:
Kelly Kimberly
(713) 646-6416
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