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Endesa Will Invest Euro 1.4bn to Develop Various Energy Projects in
Galicia in the Next Five Years
Reganosa, a company in which Endesa holds a controlling stake and
which is constructing a regasification terminal in Mugardos-Ferrol,
signed a syndicated loan for Euro 416 million in Madrid today to
finance this project. Among others, the plant will supply an 800MW
combined cycle plant that Endesa is building in As Pontes. Both
initiatives form part of Endesa's Capex Plan.
BBVA and Caixa Galicia are the leaders of this financial
operation, in which Banca Intesa, BNP, Cajamadrid, Caixanova, ICO and
Royal Bank of Scotland are also taking part; Caixa Galicia is the
credit agent. The loan is for Euro 370 million, which the group will
use to construct the regasification plant at Mugardos and the gas
pipeline network. An additional credit line will also be made
available to cover the VAT charge on the investment - Euro 46 million
- bringing the total loan to Euro 416 million.
The financial consortium was selected through an international
tender which Endesa's Finance Division helped Reganosa to organise.
The tender attracted an enormous amount of interest, with 16 proposals
being put forward.
The main Euro 370 million credit will be structured as a 25-year
project finance loan. This amount, plus the company's shareholders'
equity, will be sufficient to construct the regasification plant and
start commercial operations in early 2007.
Reganosa was created specifically to build and operate the
Mugardos-Ferrol regasification plant. Endesa holds a 21% stake in this
company, in which Union FENOSA Gas, Sonatrach, the Tojeiro group, the
Galician regional government and financial institutions Caixa Galicia,
Banco Pastor and Caixanova also hold shares.
The plant will have two 150,000m(3) LNG storage tanks. The outer
shell of the tanks and the loading line have already been completed
and the global execution of the project stands at 60%. In a year's
time the terminal is scheduled to receive its first methane tanker to
cool the tanks after which the test period will start. Commercial
activity is slated to begin in the first quarter of 2007.
When it reaches normal operating levels, Reganosa will supply the
gas network with the equivalent of 8% of Spanish gas demand. A large
part of the plant's regasification capacity will be used by Endesa to
fuel an 800MW combined cycle plant to be built in As Pontes on top of
the 1,400MW coal-fired plant which is already operating in this area.
This coal-fired power plant is currently being transformed to use
imported coal exclusively once the adjacent mine is closed down in
2008.
In addition to these projects, Endesa plans to build a new coal
terminal in Ferrol, with capacity to unload some five million tonnes
of this fuel. A wind turbine factory will also be constructed in
Ferrol and as part of the Group's extended wind farm plan (more than
800 additional MW).
In total, Euro 1.4 billion will be invested in Galicia by the
company over the next five years - the biggest investment package seen
in this region in several decades. Today, Endesa has a large and
diverse generation business in Galicia with 1,400 MW of thermal
capacity, 438 MW of wind farm capacity and 376 MW of hydro capacity.
Although the Reganosa project should revitalise the manufacturing
framework of Galicia, it also has a national scope as it will mean a
new entry point for gas in the Iberian peninsula which should help to
create a more balanced Spanish gas system. It will also diversify gas
supply in terms of where it comes from and who the suppliers are.
* This document may contain certain forward-looking statements
regarding anticipated financial and operating results and statistics
that are subject to risks and uncertainties as well as to material
risks, changes and other factors which may be difficult to predict,
including, without limitation, those factors described in the
Documento de Registro de Acciones of Endesa filed within the Comision
Nacional del Mercado de Valores and in the Form 20-F of Endesa filed
within the Securities and Exchange Commission, both for the fiscal
year ended December 31, 2004. For all of these forward-looking
statements, we claim the protection of the safe harbour for
forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995.