Orascom to close power plant funding by Q1 2016

CEO says first phase likely to generate 1,800-2,000MW of power and take up to 38 months to build

Orascom Construction CEO Osama Bishai
Orascom Construction CEO Osama Bishai

Orascom Construction has said that it expects to achieve financial close for the first phase of the $5bn power plant it is building with Abu Dhabi's IPIC by the end of Q1 2016.

Speaking to media after the company's debut on the Nasdaq Dubai market this morning, CEO Osama Bishai said: "This is a project that we are working on very aggressively right now."

He said that it was currently in discussions with banks for raising the debt element of the project, which typically represents around 80% of project finance.

Orascom Construction and IPIC, as 50/50 joint venture partners, will be expected to contribute the remaining 20% in equity, unless its joint venture takes on other partners who can bring in technical expertise.

The clean coal-fired plant is being built on a fast-track basis near to the El Hamarawein port on the Red Sea coast. Bishai said that it is likely to generate between 3,000-4,000MW of power and be built in two phases.

He said that a plant of around 1,800MW-2,000MW could be built as part of a "$1bn-plus" first phase.

"We are targeting that we will achieve financial close if not at the end of this year, the beginning of first quarter next year," said Bishai.

He added that the plant could take from 30-38 months to build, but that work could start on site prior to the joint venture finalising its funding.

Any decision on building the second phase would be taken in line with market demand, he added.

"Being an investor in the power plant we would need to time the second phase to match the Ministry of Electricity's demand for future plans.

"If we are allowed an overlap, we will definitely do that."

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