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Société Générale is looking to close a $217 million, 16-year project loan for the construction of Rio Bravo III, a 500 MW gas-fired plant in northern Mexico, by August. A project financier close to the transaction says he expects syndication will be launched toward the end of this month, but declined further comment. The generation facility is forecast to cost $290 million to build and project sponsor Electricité de France will provide the remaining $73 million of the costs with internal cash (PFR, 3/4).

Omaha, Neb.-based Tenaska has started the ball rolling on financing an 885 MW plant it plans to build in Virginia. The privately held IPP has just begun an RFP process for a non-recourse loan, so terms are unlikely to be firmed up until at least month-end, says one project financier who was unable to provide further details on the plant or the possible financing structure. Calls to Howard Hawks, chairman, were referred to a spokeswoman who confirms the funding part of the project has been initiated. Tenaska expects to have the financing complete in the third quarter, she adds.

Bank of Toyko-Mitsubishi, KBC Bank and Bank of Scotland have committed funds to the GBP257 million ($365 million) Immingham project loan in the U.K., but lead arranger Royal Bank of Scotland is holding out for at least one more commitment before wrapping up syndication, say bankers still looking at the transaction.

Some analysts think Dearborn, Mich.-based CMS Energy will decide to pull the plug on its power trading business. The recent disclosure of large-scale round-trip trades will result in restated financial results for 2000 and 2001 and also prompted the departure of William McCormick as chairman and ceo. "Given that confidence and credibility are as big a part of the marketing and trading business as a strong balance sheet, [CMS Marketing, Services and Trading] will likely have a difficult time surviving on a go forward basis. We would not be surprised to see the company exit the business sooner than later," Lehman Brothers analyst Dan Ford wrote in a research note last week. Calls to Ford were not returned by press time and CMS Spokesman Dan Bishop declined comment on the possibility of the trading unit being closed.

While many U.S. power companies have begun pulling back from trading, officials from TXU Energy and PG&E National Energy Group told delegates their trading operations are here to stay as they form an integral part of managing their portfolio of generations assets.

American Electric Power has started using counterparty value-at-risk modeling (CVaR) to better manage its risk exposure and identify the need for counterparties to post collateral. The Columbus, Ohio energy concern has begun using the technique to help determine when it should begin scaling back counterparty trading, explained Frank Hilton, chief credit officer. CVaR is an estimate of possible future movements in counterparty exposure. "In the past we've not been a big user of CVaR, but there are lots of good reasons [for using it]," he told the conference.

BookrunnerCredit Suisse First Boston and co-lead Scotia Capital have signed up 11 banks during syndication of a $365 million, four-year non-recourse loan on behalf of Conectiv and could sign up a further four lenders shortly.

Fortum has completed the sale of its 240 MW Glanford Brigg combined-cycle gas-fired power station in Lincolnshire, U.K., to Centrica for EUR60 million. Tapio Kuula, president of Fortum's power and heat unit said, "We are pleased to announce this disposal, which is another step forward in our strategy to focus on businesses where we can achieve a strong market position. We will continue to consolidate our production assets in the Nordic region" (Dow Jones, 7/1).

New York-based Consolidated Edison tapped the bond mart last Monday with a $300 million issue of 10-year senior notes and plans to use the proceeds to help fund its five-year, $5.7 billion capital expenditure program. John Perkins, director of financial services, says the capital from the program will primarily be used to explore new business opportunities and maintain existing electric facilities. He adds the utility decided to issue the notes to take advantage of attractive interest rates and low spreads.

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