National Power of the UK has dropped plans to buy a 20% stake in Tenaga Nasional's 2,420 megawatt MW Kapar Power Station, owing to excessive refinancing risks. These stemmed from the fact Tenaga is providing three-year finance for the deal, which involves a 25-year lease on the power plant.
It was the refinancing risk in year three that was the issue, says Mike Baker, National Power's project development manager in Malaysia.
Under the terms of the deal, Tenaga planned to sell the power plant for M$6.27 billion $1.65 billion to a special purpose vehicle, called Kapar Energy Ventures KEV, split 602020 between Tenaga, Malakoff and National Power. M$2.27 billion...
