UPDATE – Nine banks help fund rehab of Russia’s Volga-Kama

Nine international banks have joined a European lender’s arrangement to provide 6.3 billion rubles (US$240 million) to Russian hydropower company HydroOGK for rehabilitation of the 10,000-MW Volga-Kama hydropower cascade.

HydroOGK announced in August it will pre-qualify bidders to rehabilitate the Volga-Kama plants, increasing their capacity by 600 MW. (HNN 8/29/06) HydroOGK, owned by electricity monopoly Unified Energy Systems, announced in July it obtained the loan from the European Bank for Reconstruction and Development (EBRD). (HNN 7/31/06)

Upon finalizing the loan September 8, EBRD said it structured an A/B loan arrangement, in which EBRD would provide the 2.3 billion ruble (US$90 million) A loan for 14 years.

Providing the 4 billion ruble (US$150 million) B loan are: co-arrangers Standard Bank PLC, Bank Austria Creditanstalt AB, and ING Bank (Eurasia) ZOA; lead managers Calyon, Fortis SA/NV, and ZAO Raiffeisenbank Austria; and managers ZAO Citibank, Credit Suisse, and Banque Societe Generale Vostok.

The B loan is in two tranches, with 3.15 billion rubles (US$120 million) for ten years from Standard Bank, ING, Bank Austria, Calyon, and Fortis at 305 basis points over Mosprime; and 850 million rubles (US$31.75 million) for eight years from the remaining banks at 275 basis points over Mosprime.

The company said the loan would be used to upgrade the Volga-Kama cascade in a 10.9 billion ruble (US$410 million) program set for completion by 2020.

HydroOGK plans to pre-qualify bidders for work to:
o Rehabilitate turbines and generators;
o Supply and install high-voltage transformers and substation equipment; and
o Supply control systems.

Procurement of the various components is to be carried out under separate contracts. Pre-qualification is to be carried out under EBRD guidelines.

For information, contact Timohin Alexey, Head, Department for Maintenance, Refurbishment, and Reconstruction Realization, HydroOGK, (7) 495-5403012; Fax: (7) 495-5403014; E-mail: timohinas@gidroogk.ru.

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