$2.2 billion worth of power

Panda Energy and Teco Power Services have closed on bank financing for what they claim are the two largest independent power projects in the US.

A $2.2-billion transaction, which includes $1.7 billion in non-recourse debt and a $500-million equity bridge loan, will cover construction costs for the TPS/Panda joint venture’s Union Power Station (also known as El Dorado) and Gila River Power Station. The two plants represent more than 4,500 megawatts of generating capacity.

Citigroup and Societe Generale are serving as the lead arrangers for the financing, which closed with an initial group of 18 banks acting as underwriters.

The first phase of the Union facility, which is already in construction, is expected to begin commercial operation in the summer of 2002, with commercial operation of the rest of the facility slated for the following summer.

The natural gas-fueled Gila River Power Station is located in Gila Bend, Arizona. It will be brought into service in four phases and, when fully operational, will produce almost 2,300 megawatts of electricity.

Designed primarily to sell electricity throughout Arizona, Gila River is also expected to sell excess energy to wholesale customers in California, Nevada and New Mexico.

Contractors are on site at Gila River, preparing the area for full construction, which is set to begin in August. The project is scheduled to begin full commercial operation in the summer of 2003.

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