Dabhol resumes
Shockwaves were felt throughout the global business community when political forces in India stalled out the Dabhol power project. Lenders and investors felt even less secure about the risks involved with developing infrastructure projects in emerging economies, and Dabhol came to symbolize the sinkholes that lie in wait for even the best-devised projects with the strongest sponsors. The project resumed in early December, however, after the Bombay High Court dismissed the only remaining lawsuit filed against Dabhol Power Co. Now, the Dabhol project is set to become an example of how a project can succeed in a big way if it has developers with integrity, skill, flexibility, and--above all--a great deal of patience. Originally a 695 MW facility, Dabhol was renegotiated so the complex totals 2,450 MW, with one 740 MW phase and another 1,710 MW phase. {open_quotes}The additional capacity allowed us to recover the costs we incurred during cancellation,{close_quotes} says Rebecca Mark, CEO of Enron Development Corp. in Houston, Texas. {open_quotes}We reduced rates for the second phase, and we`ll handle it on a competitive basis when it comes to specifying equipment.{close_quotes} Enron is the lead developer of the project, with an 80 percent equity stake. GE Capital of Stamford, Conn., USA, and Bechtel Enterprises of San Francisco, Calif., each hold a 10 percent share in the project. {open_quotes}The changes in the project have had little effect on the financing arrangements. Additional project costs which resulted from the delays were funded by the equity group, and the debt levels and terms remain consistent with those of the original closing,{close_quotes} says Everett Smith III, executive vice president and director-international, for GE Capital Services Structured Finance Group.
- OSTI ID:
- 518405
- Journal Information:
- Independent Energy, Vol. 27, Issue 1; Other Information: PBD: Jan-Feb 1997
- Country of Publication:
- United States
- Language:
- English
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