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US company set to acquire control of Georgian generation

US-based AES Corporation has announced that one of its subsidiaries has signed an agreements to acquire control of two hydroelectric generating facilities from the Republic of Georgia.

AES Georgia Holdings BV has acquired a 25-year management contract for the Khrami I and II hydroelectric power stations, which have a combined capacity of 223MW.

In addition AES Gardabani Holdings BV will purchase the 600MW Gardabani thermal power plant outright. The total acquisition price for the three facilities is US$11M plus approximately US$80M of loans from the World Bank, European Bank for Reconstruction and Develop-ment and KfW (German Development Bank). Repay-ment of most of the loans commences in 2008 and the average rate of interest for the loan package is around 3.8%. The financing of this transaction is to be completed in the first quarter of 2000.

Approximately one-third of the Gardabani output and the entire output of Khrami I and II will be sold to AES Telasi, the AES distribution company which serves 370,000 customers in Tbilisi, the capital of Georgia. The terms of the Khrami I and II contracts are 13 and 20 years respectively. The concession agreement includes the rights for AES to export power to the wholesale electrical market in Turkey, which AES intends to pursue.