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First private power project launched in Bulgaria
10 banks provide €348 million to support rehabilitation of Maritza East III
In the first deal of its kind in Bulgaria's power sector involving private financing, 10 banks based in western Europe and Bulgaria will provide €348 million in loans to help rehabilitate and improve the environmental performance of the lignite-fired 840 MW power plant Maritza East III, near the southern city of Stara Zagora. Maritza is majority privately owned.
The European Bank for Reconstruction and Development is lending €112.1 million, while mandated lead arrangers Crédit Agricole Indosuez and Société Générale, lead arranger Banca Mediocredito (Unicredito Italiano Group) and arranger Bank Austria Creditanstalt AG are providing €140.7 million. The Multilateral Investment Guarantee Agency (MIGA) is providing political-risk insurance to these banks. Four major Bulgarian banks - Bulbank, UBB, Biochim and SG Expressbank - are providing additional financing of €75 million. The Black Sea Trade and Development Bank is lending €20 million.
The project should result in significant economic and environmental benefits for the country and the region as it extends the life of the plant, improves its efficiency and significantly reduces environmental emissions.
Anthony Marsh, director of the EBRD's power and energy utilities team, said the project is extremely important for Bulgaria, as it will reduce pollution levels, significantly benefiting the environment and local population. Moreover, Mr Marsh hailed it as a groundbreaking private transaction for Bulgaria, which will have a high demonstration effect throughout the region.
Alexandra Boleslawski, Global Head of Power at Crédit Agricole Indosuez, and Jeremy Dolphin, Managing Director, Head of Power EMEA at Société Générale, added that the commercial banks are particularly pleased to have secured co-financing arrangements with four of Bulgaria's largest financial institutions. This financing therefore sets a very visible benchmark in the arranging of multiple sources of funding for project finance structures in the Balkan countries.
Marco Recalcati, Head of Project Finance at Banca Mediocredito, said its support for this transaction in Bulgaria carries forward the strong commitment of the Unicredito Italiano Group in eastern Europe, evident by its majority shareholdings in leading local banks (e.g. Bulbank in Bulgaria) as well as by the support given to Italian companies investing in Central and Eastern Europe.
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