9th Mar 2007 11:30
IPSA Group PLC09 March 2007 IPSA Group PLC ("IPSA" or "the Company") 9 March 2007 Agreement to acquire turbines The Board of IPSA, the independent power plant developer with operations insouthern Africa, is pleased to announce that, following the placing completed on8 March 2007, it has today entered into an agreement to acquire from asubsidiary of Siemens AG four Fiat Avio gas turbines ("the Turbines") with anaggregate generating capacity of around 500 MW. It is intended that the Turbines will be installed as part of the first phase ofgenerating capacity to be installed for the Coega Fast Track Project ("Coega")just outside Port Elizabeth in South Africa. Coega, IPSA's largest development project to date, is proposed as a combinedcycle gas turbine ("CCGT") project of 1,600 MW made up of two separate blocks of800 MW each. The Turbines being acquired will form the open cycle components ofthe initial 500 MW of the first block. Conversion of the two blocks to combinedcycle is expected to take place at a later stage. The Coega project remainssubject to the receipt of the necessary Government regulatory approvals,planning and environmental consents being granted and to financing beingcompleted. The Company has agreed to pay a total of €31.2 million (approximately US$40million) for the Turbines, which equates to c. US$80 per KW. Payment of theconsideration is scheduled in three tranches: the first tranche of 25 per cent.is payable immediately upon entering into the agreement; the second tranche of25 per cent. will be payable on 31 March 2007; and the third tranche of 50 percent. will be payable on 31 March 2008. The initial two financing payments totalling approximately US $20 million arebeing met out of the existing cash reserves and short term financing availableto the Company. The Directors are confident that longer term financing for theTurbines will be forthcoming for the Company, although the precise nature ofthat funding will be decided in due course. Peter Earl, CEO of the Company, said: 'We are very pleased to be able to acquire these turbines at an equivalent priceof just US$80,000 per MW. This allows our Coega Fast Track Project to be highlycompetitive in terms of the installed cost per MW, which is the key ratio forevery power developer. By purchasing turbines ready for immediate delivery, wecan considerably reduce the time it takes to have the first unit up and running.This is absolutely vital to South Africa at a time when there are severe powercuts affecting the whole country - but especially the Cape region. Theacquisition of the first 500 MW of turbines for Coega not only reduces the timepressure on the construction timetable but also positively improves the economicfactors influencing the returns on the project.' For further information please contact: Peter Earl, CEO, IPSA Group plc 020 7793 7676John Llewellyn-Lloyd, Noble & Company Limited 020 7763 2200 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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