- The Skikda Power Project, an 825-megawatt power plant to be built in north-eastern Algeria, has assured financing from a US governmental bank. A US$ 192 million loan guarantee will secure the deliverance from the mainly American suppliers.
The Export-Import Bank of the United States ('Ex-Im Bank') has announced the approval of a US$ 192 million loan guarantee to back a major power project in Algeria's north-eastern coastal town Skikda. Here, an 825-megawatt gas power plant is to be constructed.
The Canadian company Lavalin Constructors International and its US-based subsidiary are the main suppliers of the Skikda project. Lavalin is exporting gas-fired turbines and providing engineering services for the project.
The borrower is Shariket Kahraba Skikda (SKS), a special-purpose corporation formed to develop the project. SKS was established by two Algerian state-owned energy companies, Sonatrach and Sonelgaz, which are providing guarantees to Ex-Im Bank. New York-based Société Generale, the lender, received a 12-year guarantee from Ex-Im Bank.
- This project is a good illustration of how Ex-Im Bank supports jobs in the United States while supporting economic development in emerging markets, Philip Merrill, Ex-Im Bank's chairman, said in a statement, commenting the loan guarantee.
Mr Merrill adds that "Algeria is a growing and important market for Ex-Im Bank, and we look forward to doing more business there." Ex-Im Bank has supported many Sonatrach financing requests during the last 30 years. Currently, the Bank, which is an independent US government agency, has more than US$ 840 million in exposure in Algeria.
The Skikda Power Company has set the completion date for the advanced gas power plant to early 2006. Construction works are now to start.
The Skikda plant is part of a larger government scheme of producing more power from the country's indigenous gas reserves to provide households and the industry and to generate water. Several power and water plants are in construction.
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