Bank of China provides $44.9 million buyer's credit loan tranche (Tranche A) for 80MW Kozjak Hydropower Plant Construction Project (Linked to Record ID#42247, #85157, and #85158)

Project narrative

On July 9, 2002, Bank of China and JSC Macedonian Power Plants (ELEM) — a state-owned electricity company in Macedonia that is also known as AD Elektrani na Makedonia — signed an $89,964,628.88 buyer’s credit loan agreement for the 80MW Kozjak Hydropower Plant Construction Project. This loan had two separate tranches: a $44,982,314.44 tranche that carried a 15-year maturity, 7.5 year grace period, and 7.49% interest rate (Tranche A) and a $44,982,314.44 tranche that carried a 15-year maturity, 7.5 year grace period, and an interest rate of 6-month LIBOR (1.907% in July 2002) plus a 1.5% margin (Tranche B). The Government of the Republic of Macedonia issued a sovereign guarantee in support of this loan. Tranche A and Tranche B are captured in Record ID#42251 and Record ID#85157, respectively. Also, on July 9, 2002, China International Water & Electric Corporation (CWE) and JSC Macedonian Power Plants (ELEM) signed a $3,507,661.76 supplier credit agreement (captured in Record ID#85158) that carried the following terms: a 15-year maturity, 7.5 yer grace period, and 7.8% interest rate. The Government of the Republic of Macedonia issued a sovereign guarantee in support of this supplier credit. The purpose of this project was to construct an 80MW hydroelectric power plant on the Treska river, 25 kilometers from the capital of Skopje. Hainan S.I.T. Enterprise (Хаинан С.И.Т. Ентерпраис Корп) was originally designated as the contractor responsible for implementation during the mid-1990s. However, it underperformed and ultimately went bankrupt. Then, in 2002, Hainan S.I.T. Enterprise was replaced with China International Water & Electric Corporation (CWE), which began construction on November 2, 2002 and ended construction on July 1, 2004. The plant was put into operation after a trial period on September 12, 2004. The final completion certificate was issued on May 10, 2006. CWE's contract closing ceremony was held on November 27, 2009, the same day that full operational capacity was finally achieved. By August 2010, the power generation capacity of the plant had reached 190 million kWh. Due to Hainan S.I.T. Enterprise’s inactivity, ELEM suffered $2.8 million of financial losses, which were covered by Sinosure indemnity payments (see Record ID#42247).