Credit Suisse to select partners for Dhabol Power

NEW DELHI, DEC. 25. Enron International has appointed Credit Suisse First Boston to look for a fifth partner for its $1.87 billion phase-II Dabhol power project at Guhagar after the Maharashtra State Electricity Board (MSEB) expressed its "inability to invest for the time being." "International financial consultants Credit Suisse First Boston have been appointed to look out for a fifth partner, to replace MSEB's 15 per cent equity for the phase-II, while the balance 15 per cent has been acquired by us," company sources said here.

The new partner was expected to pump in $64 million, half of MSEB's 30 per cent worth $128 million, they said adding Enron's stake in phase-II has risen to 65 per cent after it acquired 15 per cent of MSEB.

Enron has decided to offload 15 per cent of its holding in the project to a new entity as per company's global debt- consolidation to maintain its stake at 50 per cent in Dhabol Power Company after its completion, they said.

"We agreed to meet with equity shortfall, arising out of MSEB's inability to chip in its share, to avoid any delay in the project," sources said adding the MSEB would be offered 15 per cent equity in the phase-II as when it has money to pay.

DPC's 1,444 MW phase-II has a fixed component of equity funding which after the induction of the fifth partner would be Enron 50 per cent, MSEB 15 per cent, new entity 15 per cent, General Electric 10 per cent and Bechtel Enterprises 10 per cent.

Enron is setting up the $2.8 billion 2,184 MW plant in two phases, the second phase was still under construction along with a $494 million LBG gasification unit (also under installation).

The Foreign Investment Promotion Board last week cleared a Rs. 1,083 crore foreign direct investment proposal of Enron for the Dhabol phase-II that would enable the Houstan-based energy giant to restructure foreign equity in the project.

The MSEB has taken 30 per cent share in phase-I where Enron has a 50 per cent stake and General Electric and Bechtel hold 10 per cent stake each. Enron officials said the cost of its power to MSEB would come down by at least 25 per cent to below Rs. 4 per unit by end of 2001 when phase-II was expected to be completed.

As per the power purchase agreement, the MSEB is to pay through a system of guaranteed electricity tariffs that would begin at eight cents a kilowatt hour and rise to 33 cents a kilowatt hour by the project's slated termination date in 2017.

The cost of power from naphtha based phase-I has shot up to over Rs. 7 a unit this month due to rising international fuel cost and appreciation of dollar against the rupee, they said adding DPC would switch over to liquefied natural gas (LNG), which was 20 per cent cheaper than naphtha as feedstock after completion of phase-II.

Power tariff from Dhabol would, however, continue to be fuel price sensitive, they added.

- PTI

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