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Merchant Power: Different stokes
01 January 2000
InterGen wants a piece of European merchant power. But stoking bank interest is going to mean different comfort mechanisms for different markets. Louise Bowman talks merchant spread and future deals with Michael Hogan, senior vice-president International at InterGen and David McMillan finance director.
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InterGen was founded to break new ground. It has. The UK Rocksavage plant was InterGen's first commercial power plant, opened in July 1998. It was financed through a £358 million facility arranged by CSFB (including a UK tax lease) and signed off in October 1996. The 18-year financing included 15-year offtake agreements with ICI and Scottish Hydro-electric. But financing for the second UK project at Coryton has been achieved with no long term offtake arrangements in place and a significant portion of the fuel supply requirements uncontracted.
Now, the challenge for Michael Hogan, senior vice-president International at Intergen, is how to take these financing structures and apply them to the vastly different operating environments of the rest of his region: Continental Europe, Africa, the Middle East and South Asia.
"It has been a process of evolution," says Hogan. The project finance banks had to be made comfortable with...
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