In last minute talks with a visiting representative of the International Finance Corp, Electricite du Cambodge has decided to continue to support the efforts of a US-based developer it had almost given up on, a top EdC official said Sunday.
Ty Norin, executive director for EdC planning, said the state-owned utility backs the efforts of Beacon Hill Associates to complete a proposed 65-megawatt power plant for the capital, which had been scheduled to be functioning last year.
The EdC had originally supported the scheme, but grew sour as financing remain unfinalized for several years.
Ty Norin confirmed the EdC had retreated from an ultimatum issued several months ago to the local partner of the US firm, which warned if Beacon Hill had not solidified financing by Nov 1, the EdC would look for other investors for one of the city’s biggest planned power projects.
The EdC’s shift in position came after Morgan Randy, the director of power projects for the IFC, informed EdC officials Saturday that the IFC, a commercial lending arm of the World Bank, will be able to guarantee financing to the project, Ty Norin said.
“Now that he confirmed financing from IFC, one of three main loan lenders, will be ready by the end of this year, we will support the project because we need it,” Ty Norin said.
Industry insiders have said IFC provides funds only to projects that meet international standards, and getting the respected financier on board with this project was difficult.
During the discussion, Randy told EdC officials that about 70 percent of the planned $77 million project will be financed by the IFC, and two other international lenders, the Organization of Petroleum Exporting Countries, and the Foreign Export Credit, according to Ty Norin. He added the funding should be finalized by January.
The remaining 30 percent of the project’s cost should be shared by the IFC, a South Korean contractor, and Beacon Hill’s local partner, Cambodia Power Co, Ty Norin said.
“We’ve asked them to have a guarantee to get the project started soon, and the confirmation from IFC is agreeable,” Ty Norin said. He said was not informed of the exact figures IFC will finance.
In 1996 Beacon Hill Associates signed a 25-year deal to build a 60-megawatt power plant and to supply power to the EdC. According to the original contract, project financing was to be confirmed by late 1997 and power was to be generated by late 1998, officials said.
Randy could not be reached before he left Cambodia early Sunday. But IFC’s Phnom Penh representative said Thursday that negotiations on financing had been effectively completed.
“We’re moving forward and making progress,” said local IFC representative Don Boring. “The conclusion is getting closer.”
Cambodia Power Manager Yel Sothy could not be reached by phone on Sunday.