Swiss-based EFT Group has signed a deal for the construction of a new power plant that marks the first significant Chinese entry into the European power market.
Advised by lawyers Norton Rose LLP, EFT has awarded a contract for a 300 MW power project in Bosnia and Herzegovina to China's Dongfang Electric Corporation, one of the world's largest power generation equipment manufacturers.
The Stanari power project will be built near the Stanari lignite mine in Republika Srpska and is scheduled to enter operation in 2014. It is one of the largest energy projects of its type in the region for 30 years, says Norton Rose.
“EFT negotiated with four manufacturers of power plant equipment for the Stanari project, but Dongfang's offer was by far the most competitive,” said EFT Group Chairman, Vuk Hamovic. “The Chinese manufacturer will build a 300 MW plant on a turnkey basis in a 45 month period. The plant will have a high level of efficiency and will operate in line with the EU emission directives.”
The total value of the project is EUR500 million, of which EFT will finance 25 per cent from its own equity. The rest will be covered from credit by a consortium of Chinese and European banks.
Dongfang's President Wen Shugang said the Stanari project was “an important step in establishing Dongfang's presence in Europe, as it will be an important reference for the company's future projects on the continent”.
In 2009 Dongfang installed plants with a total capacity of 30 000 MW and achieved a turnover of EUR3.7 billion. The company operates in 22 countries and employs 24 000 people.
The Stanari plant will be the first energy generation unit in Bosnia and Herzegovina to fully abide by the EU directives on protection of the environment. The plant will set new standards in southeast Europe not only for energy efficiency, but also for minimising any harmful impact on the environment, says EFT. _
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