SG Corporate & Investment Banking (SG CIB) has financed a €135mn Austrian buyer credit and tied commercial loan for the Bucharest West Combined Cycle Power Plant to be built by Austrian company VA Tech Hydro. Romanian company Electrocentrale Bucharest (Elcen) is sponsor of the project.
This falls within the scope of the bilateral agreement signed between the ministries of economy of Austria and Romania in October 2002 which emphasised the importance of developing participation in the Romanian power sector by Austrian companies.
The Romanian government is supporting € 122mn of this project and the transaction benefits from a partial state guarantee by the Romanian ministry of public finance. OeKB, the Austrian export credit agency, is providing SG CIB with a partial cover on the Austrian buyer credit. OeKB itself will be re-insured by its French and Czech counterparts, Coface and Egap.
SG CIB acted as sole mandated lead arranger, sole lender and agent for the export credit agency-covered tranche as well as for the tied commercial loan. The bank succeeded in providing a specific funding structure with a long term maturity of 15 years together with a letter of credit issued by BRD, Soci&eaute;té Générale’s subsidiary in Romania.
Elcen is the main heat and power producer in Romania. In 2004, it supplied about 12% of the Romanian power production and 37% of the heat production, meeting the heat demand of around 670,000 households in Bucharest and Constanza. The company, founded end of 2002, already holds seven thermal power plants.
VA Tech Hydro is a company of the VA Technologie AG (VA Tech) group. The combined cycle division specialises in engineering, procurement and construction contracts of primary energy-saving gas combined cycle power plants and combined heat and power plants with a main focus on European markets.