Zakho project is designed as a natural gas simple cycle gas turbine power plant (SCGT) with a net capacity of 840 MW (Phase I) for the initial phase in Northern Iraq under a Build-Operate (BO) model backed by the Ministry of Electricity (“MoE”) through a 15 years take or pay off-take agreement for upto 80% of electricity capacity. The remainder capacity can be sold to export markets. The project company will source fuel from Ministry of Energy and Natural Resources (“MoNR”) for free of charge for the electricity sale to domestic market (KRG) and will have rights over the cash flows generated by the project during the term of the PPA (signed and secured by Kurdish Regional Government). IFC will likely become a shareholder both at the level of the SPC and holding company, in both cases as a minority shareholder, as well as being mandated lead arranger and debt provider.
Under a fixed price turn-key EPC Contract, the EPC Contractor consortium Ansaldo/Gama will be responsible for the design, manufacturing, transportation, construction, installation and commissioning of the Zakho power plant, allowing the delivery of generated electricity to the MoE transmission grid.
As part of the extension plan (Phase II), the project company has also secured the rights of combined cycle conversion of the Plant up to 1,260 MW capacity through the executed PPA, for a period of 15 years from entry into operation. Subsequent to the completion of phase I, the project company will procure financing for phase II on the basis of the current project contracts within a similar security structure.