WASHINGTON, D.C., March 7 -- The International Finance Corporation (IFC) announced that the US$204 million financing package for a combined cycle power plant on the north coast of the Dominican Republic has been completed. The financing is probably the largest private sector investment ever made in the Dominican Republic. The plant, located in the harbor area at Puerto Plata, is mounted on two U.S. built barges. A combustion turbine generator and substation are installed on one barge and a waste heat recovery steam generator, two auxiliary boilers and a steam turbine are located on the other. The plant's entire capacity is purchased by the Corporacion Dominica de Electricidad, the state utility, under a twenty year purchase agreement. It entered commercial operation as a combined cycle plant in January of this year. "This major expansion of power capacity in the Dominican Republic will ease a serious constraint on the growth of the country's economy" said Mr. Assaad Jabre, Director of IFC's Infrastructure Department. "The success of this project in raising such a significant amount of financing on a non-recourse basis, combined with the electricity reform package being prepared by the Government in collaboration with the World Bank and the Inter-American Development Bank, is likely to stimulate further foreign investment in the country's infrastructure." Enron Development Corp. the international project development arm of Houston-based Enron Corp. and Smith Cogeneration of Oklahoma are investing US$51.1 million in equity in the project. The debt portion of over $153 million is being provided by a mix of multilateral, bilateral and commercial bank finance. IFC has provided loans of US$32.25 million for its own account and has arranged a syndicated loan of US$43.9 million for the account of participants, including ING Bank (which also provided bridge financing); FMO, the Dutch official development finance company; ABN-AMFO Bank; Credit Lyonnais; Dresdner Bank; and MeesPierson. Parallel loans totaling the equivalent of US$15 million and DEM15 million were made by CDC and DEG , the British and German development finance institutions respectively. In order for the company to eliminate the potential currency mismatch resulting from Deutsche mark obligations and its U.S. dollar linked revenue base, IFC arranged a currency swap of US$10 million equivalent. A US$50 million 10.5 year bond issue guaranteed by the United States Maritime Administration (MARAD) completed the debt financing. This is the first time that MARAD-backed financing has been part of a co-financing package for a project in the developing world. IFC is a member of the World Bank Group and is the largest multilateral source of equity and loan financing for private sector projects in developing countries.
