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Presentation Outline
1. 2. 3. 4. 5. 6. 7. An Enabling Environment What has changed since 1994? The Power Purchaser Financing Requirements Financing the Transaction Security Package Conclusion
An Enabling Environment
ETA/Al-Ghurair Group have recently concluded tariff negotiations with WAPDA. Like any other developer/financier what attracted the Group to invest was: Clear policy framework Political commitment to the process Need for new power Power purchaser capable of paying for purchases Presence of other successful IPPs
Besides power, the Group is actively pursuing opportunities in the oil & gas, fertilizer and the housing sector in Pakistan.
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Financing Requirements
IPPs under the previous round were characterized by and criticized for their high project costs, which were primarily on account of: Bulk Power Tariff High equipment prices due to a supply constraint High Project Development Costs especially those related to legal & financing fees. Risk Premium associated with Pakistan
Financing Requirements
Project costs and consequently tariffs are expected to be lower on account of the following: Size of the project ensuring economies of scale Lower prices of equipment Improved risk profile of Pakistan Lower project development costs due to the availability of local technical, legal & financial expertise and advice. Lower project costs are expected to reduce the risk associated with financing the projects and there should be sufficient availability of capital.
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Conclusion
ETA/Al Ghurair Group feel that the Government, the Power Purchaser and most importantly the public itself acknowledge the role of the private sector in power generation. With an economy growing at a rate of 7% per annum the supply of power is and will remain constrained. The Government has the political commitment and has developed clear policy guidelines to attract investment in this sector. The credit standing of both the country and the power purchaser have improved. A booming stock market, a liquid banking sector and availability of a standard security package will facilitate the financing of such projects.
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Thank You
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