UPDATE - Estonia Energia, NRG sign plant upgrade deal
Date: 10-Sep-01
Country: ESTONIA
Author: Ott Ummelas
The banks invoved in the deal, which the two firms say is the biggest financial investment ever made in the Baltic states, are German KBC Bank, Japanese Tokyo-Mitsubishi and SG Investment Banking, an arm of France's Societe Generale.
Eesti Energia signed a deal last August to sell a 49 percent stake in the oil shale-fired Narva power plants - which provide over 90 percent of the country's power - to NRG Energy for $70.5 million.
In July both announced they had agreed sale details, including Narva power plants taking 51 percent of state-owned Eesti Polevkivi, clearing the way for the renovation of the plants, with only the financing scheme left to be sealed.
"The first thing now is to finalise the loan agreements...At the same time a due diligence will be done so the banks get confirmation that the technical aspects of the deal are correct," NRG's representative in Estonia Hillar Lauri told journalists.
Lauri said NRG has committed itself to transferring the money to buy its 49 percent stake in the power stations once the loan agreement has been signed.
"With the signing of this agreement today,...the deal to buy the power stations has reached the home stretch," he said.
Lauri added the details of the loan will still take some time to arrange.
"I would say we can seal the loan agreement at the earliest within one and a half months," he said.
In total 348 million euros ($308.8 million) will go to renovating the power stations and to reconstruct Eesti Polevkivi's oil shale mines, which provide fuel for the plants, and bring them up to acceptable environmental standards.
The power stations will spend 63 million euros of their own funds on the project.
Energia and NRG have already signed the renovation agreement with Finnish Foster Wheeler Energia OY, an arm of Foster Wheeler Corporation, picked in May as the best from three bids placed in a re-tender for power plants renovation.
