Financings include €51 million loan to upgrade the 405 MW Complex
ContourGlobal has announced that its subsidiary, ContourGlobal Hydro Cascade CJSC, signed two credit facilities which comprise nearly $200 million of non-recourse long term financing for Armenian business on December 29, 2016.
A $140 million long-term financing provided by the International Finance Corporation (“IFC”), Dutch development bank FMO and DEG the German Investment and Development Corporation was closed and disbursed on December 29, 2016. Proceeds from the loan will be used to refinance bridge loans and shareholder loans that were put in place to fund the acquisition of the Vorotan Facility from the Government of Armenia in 2015 and to pay an initial distribution to shareholders, as well as to fund the rehabilitation of the complex. The amortizing loan has an 18 year final maturity and IFC also provided an interest rate swap.
This financing comes alongside a €51 million loan from German Development bank KfW to the Government of Armenia that is being on-lent to the project to fund the electro-mechanical refurbishment and modernization of the plant. This on-loan, which also closed on December 29, 2016, has several tranches with maturities ranging from 2025-2050 and will be used to fund the refurbishment works. As a result of the refurbishment project, new turbines, generators, transformers and auxiliary electrical and mechanical equipment are planned to replace the old equipment in the Tatev, Shamb and Spandaryan hydro power plants, which together make up the Vorotan Facility. This will improve the reliability and safety of operations, prolong the life cycle of the plants and increase the availability factor of the cascade. The refurbishment is planned to be completed in 2021.
Joseph Brandt, President and CEO of ContourGlobal, the parent company of Vorotan, said, “We are very pleased to have completed these innovative long-term financings for Vorotan and we would like to thank our partners at IFC, FMO, DEG and KfW for their commitment to the project. We would also like to thank the Government of Armenia for their work to facilitate these transactions. These financings provide a stable, long-term capital structure which allows us to continue our work making sure that the operational performance, safety, reliability and efficiency of this plant are maintained at world-class standards.”
Vorotan is a series of three individual hydroelectric power plants with a total electrical capacity of 405 MW located on the Vorotan River in southern Armenia. The facility was acquired by ContourGlobal in July, 2015 with IFC concurrently acquiring a 20% interest in the project.