6.1 SHAJIAO B POWER STATION, CHINA33

The Shajiao B Power Station was constructed in the Guandong Province, China. The government through the state enterprise organisation, Shenzhen Power Corporation, entered into an arrangement with HPCL for the construction of power plants.

The cost of building the infrastructure is considerable, and most of the cost will be financed by a syndicated loan of US$600million and Y11billion, with Citicorp International the lead arranger. As Shenzhen Power Corporation will be purchasing the power generated, this provides a income stream on which the lenders can use as security. The supply of inputs, ie coal, is also guaranteed at a fixed price by the Shenzhen Power Corporation entering into a long term coal supply agreement with HPCL.

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³³ Ibid 172