Summary of Proposed Investment
Project Number
7131
Company Name
Smith-Enron Cogeneration Limited Partnership
Date SPI Disclosed
Aug 11, 1995
Country
Dominican Republic
Industry
Infrastructure
Status
Completed
Sector
Heavy Fuel Oil - Thermal Power Generation
Department
Regional Industry INF LAC & EUR
Environmental Category
C - No Impact
Previous Events
Approved : Aug 31, 1995
Signed : Aug 31, 1995
Invested : Jul 24, 2006
Project Description
SUMMARY OF PROJECT INFORMATION (SPI)
Project Name Dominican Republic-Smith-Enron Cogeneration
Limited Partnership
Region Latin America
Sector Power
Project No 007131
Projected Board Date August 25, 1995
Company Name Smith-Enron Cogeneration
Technical Partner and/ Enron Corp. and Smith Cogeneration
or Major Shareholders
Project Cost including US$1.5 million
proposed IFC investment
Location of project and Puerto Plata, Dominican Republic
Description of site
Description of Company and Purpose of Project
The current transaction consists of hedging the exchange rate risk represented by the fixed rate DEM15 million Deutsche Investitions- und Entwicklungsgesellschaft mbH (DEG) (the German bilateral agency) loan which is repayable over the period December 1996 to June 2005. Given that Smith-Enron''s revenues are linked to US dollars whereas the loan payments are to be made in DEM, the DEG loan would give rise to currency risk. The proposed currency swap would exactly match the DEM payments required under the DEG loan and provide a hedge, effectively transforming the liability into a fixed rate US dollar series of obligations. The currency swap transaction would be priced on the basis of standard IFC pricing guidelines for client risk management transactions. IFC''s total exposure on this risk management transaction is estimated at approximately US$1.5 million.
This transaction will support the developmental objective cited in IFC''s initial investment in this power project. The proposed swap transaction would serve as a hedge to reduce the potential currency risk arising from DEM liability payments against US dollar-based revenues. The currency swap would improve the stability of the Company''s future cashflows and enhance its underlying profitability.
Environmental Categories and Issues
The proposed transaction is of a financial nature only, and accordingly is classified as a category C Project according to IFC''s environmental review guidelines and procedures.
Date SPI sent to PIC August 11, 1995
For additional Information contact: Corporate Relations Unit -
telephone:(202) 473-7711
facsimile:(202) 676-0365.
Project Name Dominican Republic-Smith-Enron Cogeneration
Limited Partnership
Region Latin America
Sector Power
Project No 007131
Projected Board Date August 25, 1995
Company Name Smith-Enron Cogeneration
Technical Partner and/ Enron Corp. and Smith Cogeneration
or Major Shareholders
Project Cost including US$1.5 million
proposed IFC investment
Location of project and Puerto Plata, Dominican Republic
Description of site
Description of Company and Purpose of Project
The current transaction consists of hedging the exchange rate risk represented by the fixed rate DEM15 million Deutsche Investitions- und Entwicklungsgesellschaft mbH (DEG) (the German bilateral agency) loan which is repayable over the period December 1996 to June 2005. Given that Smith-Enron''s revenues are linked to US dollars whereas the loan payments are to be made in DEM, the DEG loan would give rise to currency risk. The proposed currency swap would exactly match the DEM payments required under the DEG loan and provide a hedge, effectively transforming the liability into a fixed rate US dollar series of obligations. The currency swap transaction would be priced on the basis of standard IFC pricing guidelines for client risk management transactions. IFC''s total exposure on this risk management transaction is estimated at approximately US$1.5 million.
This transaction will support the developmental objective cited in IFC''s initial investment in this power project. The proposed swap transaction would serve as a hedge to reduce the potential currency risk arising from DEM liability payments against US dollar-based revenues. The currency swap would improve the stability of the Company''s future cashflows and enhance its underlying profitability.
Environmental Categories and Issues
The proposed transaction is of a financial nature only, and accordingly is classified as a category C Project according to IFC''s environmental review guidelines and procedures.
Date SPI sent to PIC August 11, 1995
For additional Information contact: Corporate Relations Unit -
telephone:(202) 473-7711
facsimile:(202) 676-0365.
Sponsor / Cost / Location
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