Preliminary work on Lebanon’s long-awaited Deir Ammar Power Plant (DAPP2) project will begin this week, officials said, after an 18-month delay, skepticism, and rumors that it would never see light.
“Engineering works start this Tuesday … and early works will be in two months from now, toward the end of the year,” Martin Parker, from the project’s management team, told The Daily Star.
Parker further explained that early works meant preparation of the site, excavation and leveling of the ground, among other tasks.
“Our engineers are reviewing all aspects of the work and we will be updating the studies related to the project, including environmental studies because some of them were done five years ago and some of those have a validity date,” he added.
Despite not approaching lenders at the moment to fund the 550MW power plant, which cost estimates put at around $580 million, the company will be relying on its own resources at this stage until the financial paperwork is done and funding by Bank Audi and other potential lenders is secured in early 2020.
A source working closely on the project told The Daily Star that Bank Audi, which is tasked with the financing process and attempting to join forces with other potential lenders, is currently applying “a soft approach” toward other banks. “The paperwork to render the project bankable should be done in the next two months and further lenders are expected to join in by Q1 2020. Once that is done, then heavy work will commence,” the source explained.
The project was awarded in 2013 to the Greek-Cypriot company JP Avax after it won a legal tender.
Cabinet approved turning the agreement to a long-term power purchase agreement with JP Avax in May 2018. The new deal is equivalent to a build-operate-transfer agreement, under which the government will purchase electricity from the company at 2.95 cents per kilowatt-hour.
The Daily Star