Written by TCA
ASTANA (TCA) — South Korea's Samsung Engineering has put a big coal-fired power plant project in Kazakhstan on hold due to financial issues, The Korea Times reported on September 23.
"Samsung Engineering has been forced to temporarily halt the operation of the project because of an issue with the Kazakhstan government over the guaranteed purchase of the power to be produced from the project," the company's CEO Park Jung-heum was quoted by the Korean edition as saying on Wednesday.
Mr. Park said the project was stopped because of the engineering affiliate's difficulty in raising funds to proceed. He declined to comment on when the project might restart.
Samsung Engineering recently won a procurement and supervision deal in Kazakhstan for the 1,320-megawatt coal power plant in Balkhash.
Construction was scheduled to be completed by the fourth quarter of 2017. A venture between Samsung C&T, Korea Electric Power Corp. (KEPCO) and Kazakhstan started the $2.2 billion project a few years ago.
In August, The Korea Times reported that the South Korean consortium's project to build the power plant in Balkhash may be derailed due to the Kazakh government's lack of a payment guarantee.
Kazakhstan had notified Korean lenders and the consortium led by Samsung C&T and Korea Electric Power Corp. of its decision not to provide a government guarantee for the project. Instead, the Kazakh government had offered to support the project under the ordinance of the prime minister.
In 2009 the Korean consortium won the project to build a 1,320 megawatt coal-fired power plant by 2020 in Balkhash to supply 9 percent of Kazakhstan's overall power need. Samsung C&T planned to set up a 50/50 joint venture with a local company. The joint company would inject $1.5 billion to build the plant, Korea Eximbank said.
In June last year, South Korea President Park Geun-hye helped the project take a step forward when she paid a visit to Kazakhstan. In a renewed contract, the joint venture was reportedly allowed to provide electricity produced at the plant for 20 years to Kazakhstan for $940 million per year.
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