Portugal boosts reserve margin with CCGT

6 March 2008


Portuguese power developer ElecGas S. A. is to build two combined cycle units in a bid to reverse the downward trend in the country’s reserve margins.

Siemens will construct the two new units under a turnkey contract with ElecGas, a joint venture between International Power plc and Endesa. The plant will have a total capacity of 830 MW and is scheduled to come on-line in 2011.

International Power says that it has completed financing for the new plant, which will be built at a cost of EUR580 million.

Low rainfall levels and a backlog in the construction of new hydropower facilities has squeezed Portugal’s reserve margin, says Siemens. Electricity demand is growing at a steady three per cent per year in the country.

The new plant will be built near the existing Tejo Energia coal fired power plant in Abrantes, 130 km northeast of Lisbon. It will be the third power plant project handled by Siemens Energy in Portugal.

The entire output of the new plant will be sold to Endesa Generacion S.A., a subsidiary of Endesa, under a 25 year tolling contract. The plant will be owned and operated on a 50:50 basis by International Power and Endesa.

The project will be financed by a mixture of debt and equity in an 85:15 ratio. For its 50 per cent share, International Power’s equity investment will be EUR44 million.

Siemens will supply two gas turbines, two steam turbines, two generators and the entire electrical and I&C equipment. It will also be responsible for plant maintenance for a period of 25 years.

The value of Siemens’ order, including the long term service agreement, is approximately EUR600 million.

The mandated lead arrangers for the project financing are Banco Espirito Santo de Investimento, Banco Millennium BCP Investimento, Banco Santander Totta, Caixa Banco de Investimento, Caja Madrid and The Royal Bank of Scotland.




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